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Pharmacy giant Walgreens Boots Alliance has reached a deal to buy rival Rite Aid, creating a merger of two of the nation’s largest drugstore chains.
The deal announced Tuesday involved Walgreens buying Rite Aid for $9 a share, or $9.4 billion. The total size of the deal is $17.2 billion including acquired net debt, Walgreens said.
“This combination will generate a stronger base for sustainable growth and investment into Rite Aid stores, while realizing synergies over time," Walgreens Boots Alliance Executive Vice Chairman and CEO Stefano Pessina said in a statement.
The Wall Street Journal first reported the deal.
Related from CNBC: Walgreens Deal for Rite Aid Deal Likely to Succeed
Rite Aid will still operate under its own name, but that could change in the future, Pessina said.
Rite Aid shares jumped more than 40 percent Tuesday. Walgreens said in a statement it expects synergies of more than $1 billion a year.
Walgreens Boots Alliance includes Walgreens and Duane Reade stores. The company said it has more than 13,100 stores in 11 countries. Rite Aid has around 4,600 stores in the U.S., according to Rite Aid.
Walgreens had net sales of $76.4 billion in fiscal 2014, accounting for about 20 percent of the retail prescription drug market, CNBC reported. Rite Aid had prescription drug sales of $18.1 billion in fiscal 2015, up from $17.2 billion in the previous year, according to CNBC.
The deal is expected to close in the second half of 2016.