Walgreens 2015 Annual Report Download - page 16

including the failure of Rite Aid to obtain the approval of its stockholders of the transaction; that regulatory or
other approvals required for the transaction are not obtained; that litigation may be filed which could prevent or
delay the transaction; and that uncertainty regarding the transaction may adversely affect our and Rite Aid’s
relationships with suppliers, payers, customers and other third parties with which we or Rite Aid do business.
Completion of the transaction is subject to the satisfaction of certain conditions set forth in the Merger
Agreement, including the expiration or termination of applicable waiting periods (and any extensions thereof)
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, approval of the transaction by
Rite Aid stockholders, no material adverse effect having occurred with respect to Rite Aid prior to the closing of
the transaction and other customary conditions. We will be unable to complete the pending acquisition of Rite
Aid until each of the conditions to closing is either satisfied or waived. In deciding whether or not to object to the
transaction, regulatory agencies have broad discretion in administering the applicable governing regulations. As a
condition to their approval of the transaction, these agencies may impose requirements, limitations or costs or
require divestitures or place restrictions on the conduct of our business after consummation of the transaction.
These requirements, limitations, costs, divestitures or restrictions may reduce the anticipated benefits of the
transaction or affect our results of operations after the closing of the transaction. Further, we can provide no
assurance that we will obtain the necessary approvals or that any such conditions that are imposed would not
diminish the anticipated benefits of the transaction or result in the termination of the transaction. In the event that
the transaction is not completed due to the failure to obtain antitrust clearance, we could be required to pay Rite
Aid a termination fee of $325 million or $650 million in certain circumstances.
While our acquisition of Rite Aid is pending, it creates uncertainty that may adversely affect our business and
results of operations, including with respect to our relationships with suppliers, payers, customers and other third
parties with which we do business. Further, we have incurred and will continue to incur significant costs,
expenses and fees for professional services and other transaction costs in connection with the pending
transaction, as well as the diversion of management resources, for which we will receive little or no benefit if the
closing of the transaction does not occur.
If we complete our pending acquisition of Rite Aid, we may not realize the anticipated benefits of the
transaction which could adversely impact our results of operations.
We entered into the Merger Agreement with the expectation that the transaction will result in various benefits,
including, among other things, cost savings and operating efficiencies. The achievement of the anticipated
benefits of the transaction is subject to a number of uncertainties, including whether Rite Aid’s business can be
integrated into ours in an efficient and effective manner. If the Rite Aid transaction is completed, we can provide
no assurance that the anticipated benefits of the transaction, including cost savings and synergies, will be fully
realized in the time frame anticipated or at all; the costs or difficulties related to the integration of Rite Aid’s
business and operations into ours will not be greater than expected; unanticipated costs, charges and expenses
will not result from the transaction; litigation relating to the transaction will not be filed; we will be able to retain
key personnel; and the transaction will not cause disruption to the parties’ business and operations and
relationships with employees and suppliers, payers, customers and other third parties with which we do business.
If one or more of these risks are realized, it could have a material adverse impact on our operating results.
The anticipated strategic and financial benefits of our acquisition of Alliance Boots may not be realized.
Walgreens and Alliance Boots entered into the Purchase and Option Agreement dated June 18, 2012, as amended
on August 5, 2014 (as amended, the “Purchase and Option Agreement”), and consummated the first and second
step transactions contemplated thereby, with the expectation that the transactions would result in various benefits
including, among other things, procurement cost savings and operating efficiencies, revenue synergies, increased
innovation, sharing of best practices, and a strengthened market position that may serve as a platform for future
growth. The processes and initiatives needed to achieve these potential benefits are complex, costly, and time
consuming, and we have not previously completed a transaction comparable in size or scope. Many of the
expenses that will be incurred, by their nature, are difficult to estimate accurately. Achieving the expected
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