Walgreens has attempted to acquire the entirety of Rite Aid since 2015, but instead Rite Aid will now sell 2,186 of its stores, related distribution assets and inventory for an all-cash purchase price of $5.175 billion. The stores are mostly located in the Northeast, Mid-Atlantic and Southeastern regions of the U.S..

The agreement gives Rite Aid the option to buy generic drugs that are sourced through an affiliate of Walgreens at cost for 10 years. In return, Rite Aid will provide certain transition services for up to three years after the transaction is expected to close within six months.

Since the transaction didn't end in a complete acquisition of Rite Aid, Walgreens will pay a termination fee of $325 million in cash.

The deal has already been approved by the board of directors of both companies and doesn't require a shareholder vote. The deal also remains subject to the appropriate regulatory and antitrust approvals.

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