Rite Aid’s (NYSE:RAD) failed merger with Walgreens Boots Alliance (NASDAQ:WBA) has resulted in the stock price plunging. Over the last few months, the stock price was coming down gradually as the doubts started to arise due to the regulatory concerns. Today, Walgreens has announced that the merger agreement has been cancelled, and instead, they will be buying more than 2,100 of Rite Aid’s stores for $5.175 billion in cash. In addition to this, Walgreens will pay $325 million in termination fees to Rite Aid. Divestment of Rite Aid’s stores to Fred’s (NASDAQ:FRED) has also been terminated. So, in total, Rite Aid will receive $5.5 billion for selling almost half of its stores to Walgreens.

The revised merger agreement from Walgreens was dependent on the number of stores it will have to divest in order to gain regulatory approval. In case the company had to divest more than a thousand stores, Rite Aid shareholders would have received $6.5 for every share. The original agreement for Rite Aid was $9 per share, which was amended as it could not be closed by the deadline in January. Total deal value at the start of the deal was over $17 billion, including over $9 billion in debt. However, amended agreement brought the value of the deal down to around $14 billion. If we take into account the value of the stores, Rite Aid is getting a better deal now. It is now selling almost half of its stores for almost the same equity value.

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