A federal bankruptcy court in New Jersey has approved the sale of pharmacy assets from more than … More
A federal bankruptcy court has given the green light for the sale of pharmacy assets from over 800 Rite Aid stores to CVS Health, Walgreens, and grocery store chains like Kroger and Albertsons.
The pharmacy assets include 64 physical Rite Aid stores in Idaho, Oregon, and Washington that will now be under the management of CVS. CVS also successfully bid on the prescription files of 625 Rite Aid pharmacies across 15 states, a move that was confirmed by CVS on Wednesday evening. The remaining pharmacy assets approved for sale by the court mainly consist of prescription files that will be acquired by competing drugstore chain Walgreens and grocery retailers Albertsons, Kroger, and Giant Eagle.
The sale transactions have been sanctioned by the U.S. Bankruptcy Court for the District of New Jersey. CVS mentioned in a statement that the sales are still pending regulatory approvals and other customary closing conditions. More details will be provided as the transaction closing dates draw near in the upcoming weeks.
The specific sale prices for Rite Aid’s pharmacy assets have not been disclosed yet. This marks a significant development for Rite Aid as the drugstore chain filed for Chapter 11 bankruptcy protection last week for the second time in less than two years.
By acquiring the prescription files, CVS, Walgreens, and others are able to avoid taking on additional debt from physical stores. It is a common strategy for pharmacy chains, retailers, and grocers in the pharmacy industry to pursue prescription files and related assets during Chapter 11 bankruptcy proceedings.
In a similar scenario in 2019, Walgreens, CVS, and Rite Aid were successful bidders for prescription files and related assets from 120 Shopko locations as part of the general merchandise retailer’s financial restructuring at that time.
Shopko had decided to exit the pharmacy business as part of a turnaround plan by the Green Bay, Wisconsin-based retailer. Over 20 bidders participated in the auction for prescription files and other assets, with the end result being the acquisition of Shopko customer prescription files by various buyers.
In the case of Rite Aid, the drugstore chain has secured buyers for customer files at 810 of its stores, but has not found buyers for the files at the remaining 200 stores, as reported by Reuters on Wednesday. As of Wednesday evening, Rite Aid’s website’s store locator listed over 1,200 stores across 15 states.
