NEW YORK - Walgreens Boots Alliance Inc. is near a deal to acquire Rite Aid Corp., the Wall Street Journal reported, a transaction that would further expand the company’s role in the distribution of medications in the United States.
The deal may be announced Wednesday, the newspaper said, citing people familiar with the matter. The Journal didn’t say how much Walgreens would pay for the acquisition.
Rite Aid shares jumped 36 percent to $8.27 at 1:32 p.m. in New York, valuing the drugstore chain at $8.7 billion. The shares had slumped 29 percent since Sept. 16 after the company lowered profit and revenue forecasts for the year, giving Walgreens a potential opportunity to make an offer.
Speculation that Walgreens would pursue Rite Aid rose to a crescendo in March after billionaire Stefano Pessina, who took over in January as interim chief executive officer at Walgreens after it acquired Alliance Boots, said he envisioned doing his next big deal in the U.S.
Rite Aid didn’t immediately respond to a phone call seeking comment. A Walgreens spokesman declined to comment.
In addition to expanding its drugstore locations, a Rite Aid deal would give Walgreens its first foray into the business of managing drug benefits for insurers and employers, an area where rival CVS Health Corp. is a leader. Rite Aid entered that business by acquiring Envision Pharmaceutical Services for about $2 billion this year.
Shares of drug distributor McKesson Corp. dropped 5.8 percent, while AmerisourceBergen Corp., Walgreens’ distribution partner for medications, jumped 4.6 percent. Rite Aid represents about $18 billion of McKesson’s revenue, according to Evercore ISI.
While Pessina had made clear his appetite for deals, he had been cagey about what kind of acquisition he might pursue. He has said only that the company wanted to participate in what he saw as the inevitable consolidation of the long distribution chain that delivers drugs from manufacturers to patients in the U.S.
Walgreens already has a foothold in the drug-distribution business after it signed a 10-year agreement with AmerisourceBergen in 2013 and became the company’s third-largest shareholder.
Today’s Walgreens was built by acquisition. Pessina developed Bern, Switzerland-based Alliance Boots GmbH into a powerhouse through more than three decades of mergers before selling it to Walgreen Co. last year. He’s now the company’s largest shareholder with a 13 percent stake.
Walgreens is scheduled to report fiscal fourth-quarter results Wednesday morning.