Walgreens to settle Rite Aid investors' merger claims for $192 million
Reuters
Published Oct 19, 2023 11:24AM ET
Updated Oct 19, 2023 04:27PM ET
(Reuters) -Walgreens Boots Alliance has agreed to pay $192.5 million to settle a class action lawsuit by investors in Rite Aid (NYSE:US90274J5618=UBSS) who accused Walgreens of misleading them in 2017 about scrutiny of the two drugstore chain operators' then-pending merger.
The deal filed in Pennsylvania federal court on Wednesday is subject to approval by District Judge Jennifer Wilson.
David Knotts, an attorney for the shareholders, said the case was "intensely fought." "We're very pleased with the result and look forward to the court's review," he said.
A spokesperson for Walgreens declined to comment.
The Rite Aid investors sued Walgreens and its executives over statements they made about the proposed merger between the two major U.S. pharmacy chains, which was first announced in 2015.
The lawsuit accuses Walgreens of downplaying scrutiny from U.S. antitrust regulators starting in October 2016.
Walgreens ultimately scrapped the takeover plan in June 2017 after failing to win approval from the Federal Trade Commission.
Walgreens, which operates stores under its own name as well as Boots stores in Britain and Duane Reade stores in the United States, instead bought around 42% of Rite Aid's existing stores that year for $4.38 billion.
The settlement with investors comes on the heels of Rite Aid filing for bankruptcy protection as it struggled with high debt and costs from opioid litigation.
Under the current proposed bankruptcy plan, the company's shares would be dissolved with no compensation to shareholders.
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Written By: Reuters
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