PORT ANGELES — The sale of the North Olympic Peninsula’s only Rite Aid Corp. stores — two in Port Angeles and one in Sequim — hangs in the balance as part of a nationwide merger that would turn Rite Aid rival Walgreens into a drugstore giant.
Their sale would be a minuscule part of a three-way, $11 billion transaction that could be completed “by early 2017,” Walgreens spokesman Michael Polzin said Thursday.
It involves Pennsylvania-based Rite Aid Corp.; Illinois-based Walgreens Boots Alliance, owner of the Walgreens drugstore chain; and Tennessee-based Fred’s Inc., which owns 647 general merchandise stores.
The North Olympic Peninsula Rite Aids are in Port Angeles at 621 S. Lincoln St. and 1940 E. First St., and in Sequim at 520 W. Washington St.
Polzin and Rite Aid spokeswoman Kristin Kellum would not comment if Walgreens or Fred’s would own the Port Angeles or Sequim locations.
“Specific locations of the stores to be divested will be announced upon FTC approval of the Walgreens Boots Alliance and Rite Aid merger,” Kellum said Thursday afternoon in an email.
Under the sale, contingent on Federal Trade Commission approval, Walgreens would purchase Rite Aid’s 4,600 stores for an estimated $9.4 billion and sell 865 of the stores to Fred’s Inc. for $950 million, Polzin said.
Walgreens, which already has a store in Port Angeles and one in Sequim, announced the sale of stores to Fred’s on Tuesday in response to FTC anti-trust concerns over Walgreen’s purchase of all of Rite Aid’s announced in October 2015, Polzin said.
“The FTC is concerned about competition,” he said.
“We would sell stores to a third party, and in that way preserve competition in those areas.”
Even with Walgreens acquiring fewer Rite Aid stores than originally planned, Polzin said Walgreen’s still will become the country’s largest pharmacy chain, far surpassing its closest competitor, CVS Health Corp.
Polzin said Walgreens stores, which average 20-25 employees, would not be in danger of closing as part of the three-pronged purchase of Rite Aid.
Store managers at the three stores said Thursday they were not authorized to comment on the transaction.
Managers at the two Port Angeles Rite Aids said they did not know any more than what was contained in Rite Aid’s Tuesday press release announcing Fred’s pending purchase of the Rite Aids.
The Sequim store is on West Washington Street and directly across the street from a Walgreens at 490 W. Washington St.
The Port Angeles Walgreens is at 932 E. Front St., geographically between the East First Street and South Lincoln Street Rite Aids.
A Fred’s Inc. spokesman could not be reached for comment late Thursday.
Fred’s would continue to operate the purchased stores under the Rite Aid name during a transition period, according to the news release.
Polzin said Thursday he does not know when a decision will be made on the fate of the Rite Aid stores that Walgreens will own.
“We will be making a decision over time on how to best harmonize the two companies,” he said.
The company “expects that it will realize synergies from the acquisition of Rite Aid in excess of $1 billion” that would be realized within four years of the merger being finalized, according to the Tuesday news release.
“These synergies, as previously disclosed, are expected to be derived primarily from procurement, cost savings and other operational matters.”
Rite Aid first opened as Thrift D Discount Center in Scranton, Pa. in 1962.
The company added more than 1,000 stores in 1996 by expanding to the West Coast through acquisition of Thrifty PayLess Holdings Inc., Harco Inc. and K &B. Incorporated.
Rite Aid purchased the Brooks and Eckerd in 2007, making Rite Aid the third largest drugstore chain in the U.S.
Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 55650, or at [email protected].