Item 2.01. Completion of Acquisition or Disposition of Assets.
As previously disclosed, on September 18, 2017, Rite Aid Corporation,
a Delaware corporation (the “Company”), entered into the Amended and Restated Asset Purchase Agreement (the “Asset
Purchase Agreement”) with Walgreens Boots Alliance, Inc., a Delaware corporation (“WBA”), and Walgreen Co., an
Illinois corporation and a wholly owned subsidiary of WBA (“Buyer”). Under the Asset Purchase Agreement, Buyer will
purchase a total of 1,932 stores, three distribution centers and related inventory from the Company for an all-cash purchase price
of $4.375 billion on a cash-free, debt-free basis. As of February 8, 2018, the Company has completed the disposition of another
“significant amount” of the Company’s assets within the meaning of, and in accordance with, the standards set
forth in Item 2.01 of Form 8-K. This is in addition to the “significant amount” of the Company’s assets disposed
of as of January 18, 2018, as set forth in Item 2.01 of the Company’s Current Report on Form 8-K, filed with U.S. Securities
and Exchange Commission (“SEC”) on January 22, 2018, and which is incorporated herein by reference.
As previously disclosed, the Company has been transferring ownership
of Company stores and related assets to Buyer in a series of ongoing closings, with the goal of completing the store transfers
in the spring of 2018. As of February 8, 2018, the Company has transferred 1,114 stores and related assets and has received cash
proceeds of $2,424,389,610 (the "Proceeds"). The Company continues to use the Proceeds to reduce its outstanding indebtedness. The majority of the closing conditions have been satisfied, and
the subsequent transfers of Company stores and related assets remain subject to minimal customary closing conditions applicable
only to the stores being transferred at such subsequent closing, as specified in the Asset Purchase Agreement. The Company does
not have any material relationship with WBA or its subsidiaries, including Buyer, out of the ordinary course of business other
than in respect of the transactions contemplated by the Asset Purchase Agreement, including the continued disposition of assets,
a transition services agreement and the Company’s option to purchase generic drugs from an affiliate of WBA, under terms,
including costs, that are substantially similar to WBA for a period of ten years.
The unaudited pro forma financial information for the Company
giving effect to the sale of all assets contemplated by the Asset Purchase Agreement, which was filed as Exhibit 99.2 to the Company’s
Current Report on Form 8-K with the SEC on January 22, 2018, is incorporated herein by reference. Specifically, the pro forma financial
information gives effect to the completion of the sale of 1,932 stores, three distribution centers and related assets pursuant
to the terms of the Asset Purchase Agreement, including the sale of the remaining Company stores, distribution centers and related
assets that have not occurred as of February 8, 2018 given that such sales are probable, in accordance with Article 11 of Regulation
S-X. Although the Company believes that the sale of the remaining stores and related assets to Buyer will be consummated during
the spring of 2018, there can be no assurance that all of the remaining closings will occur, and there can be no assurance that
the Company’s actual results would have been as set forth in the pro forma financial statements, and such differences could
be material. As previously disclosed, the Company does not intend to update the pro forma financial statements incorporated by
reference herein unless the Company is required to update such pro forma financial statements by applicable legal requirements.
The foregoing description of the Asset Purchase Agreement and
the transactions contemplated thereby is not complete and is subject to, and qualified in its entirety by, the full text of the
Asset Purchase Agreement, a copy of which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with
the SEC on September 19, 2017, and which is incorporated herein by reference.