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Rite Aid hands off first batch of stores to Walgreens

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(File photo)
(File photo)

Walgreens Boots Alliance Inc. has taken over the first 97 stores from Rite Aid Corp. as part of a larger store sale valued at nearly $4.4 billion.

Rite Aid is selling 1,932 stores overall to Walgreens, with the store transfers expected to wrap up by spring 2018.

Spokespeople for both chains did not return calls or emails asking about the locations of the first 97 stores to be sold.

In a news release, Rite Aid said the majority of closing conditions had been satisfied.

"I am proud of the entire Rite Aid team for their commitment and dedication to helping us reach this milestone," company chairman and CEO John Standley said in a statement. "I also want to thank our team for their continued support as we complete the transfer process over the next several months and implement our plans to deliver improved results."

In the quarter ending Sept. 2, Rite Aid posted net income of $170.6 million, up from $14.8 million from the comparable quarter a year earlier.

Sales for the quarter ending Sept. 2 were $7.7 billion, down from a little more than $8 billion for the year-ago quarter.

Rite Aid said it plans to use sale proceeds to pay down debt and is likely to record a taxable gain on the deal.

The store deal follows Walgreens' unsuccessful bid to buy Rite Aid outright, although Rite Aid remains a subject of merger speculation.

Most of the stores being sold to Walgreens are in the southeastern U.S. The deal will leave Rite Aid with stores primarily on the East and West coasts.

Walgreens, meanwhile, has said it is likely next year to close Rite Aid stores that are close to existing Walgreens stores.

Based in East Pennsboro Township, Cumberland County, Rite Aid entered into the sale with more than 4,500 stores and annual revenue of about $30.7 billion in 2016.

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