By Austen Hufford and Sharon Terlep

Walgreens Boots Alliance Inc. and Rite Aid Corp. agreed to reduce the amount Walgreens would pay for its rival by at least $2 billion, after the two companies struggled to get antitrust enforcers to bless the big drugstore deal.

The companies said Monday they would look to sell more stores as they seek to satisfy regulators at the Federal Trade Commission, which has been reviewing the combination. The process may take up to six months, they said.

Shares of Rite Aid tumbled 17%to $5.72 on Monday. Walgreens shares barely budged.

Walgreens in October 2015 agreed to buy Rite Aid for $9 a share, or about $9.4 billion, to form a drugstore chain with more than 10,000 U.S. stores. FTC officials had raised concern that such a big company could hold too much sway in negotiations with pharmacy-benefits managers like CVS Health Corp.'s Caremark or Express Scripts Holding Co., which handle corporate and government drug plans.

Walgreens and Rite Aid tried to satisfy FTC officials in the fall by agreeing to sell 865 stores to regional chain Fred's Inc. , which would borrow heavily to fund the transaction.

The companies on Monday said they may sell a total of up to 1,200 of Rite Aid's 4,600 stores -- but it is unclear how easily they could find a buyer that satisfies regulators.

On Monday, Walgreens and Rite Aid extended the deadline for their agreement until the end of July. That delay will give them time to find a buyer for any divested stores but could also mean the companies will be dealing with different officials at the FTC.

President Donald Trump has designated Republican Maureen Ohlhausen as acting chairman of the FTC. She could use her new role to select a new head of the FTC's bureau of competition, which makes recommendations on merger approvals. The president also is expected to nominate two additional Republican commissioners to fill longstanding vacancies.

Leerink analyst David Larsen said the deal has better odds of being approved by a Republican-controlled FTC.

"We're going to see CVS and Walgreens compete even more effectively and it's possible the Republicans will understand this and see the value in it," he said.

An FTC spokesman declined to comment.

Under the new terms announced Monday, the deal would value Rite Aid at between $6.8 billion and $7.4 billion, depending on how many stores the pair endsup divesting. The per-share value of the new deal will range from $7 per share if 1,000 locations or fewer need to be sold, to as low as $6.50 per share if 1,200 store divestitures are required.

Private-equity firm Cerberus Capital Management LP was interested in acquiring the stores ultimately sold to Fred's, people familiar with the matter said. The stores would have become part of the Albertsons Cos. grocery chain, owned by a Cerberus-led group of buyout firms.

The companies worried antitrust regulators wouldn't sign off on a private-equity buyer and opted for Fred's despite a lower price, one of the people said. Cerberus hasn't spoken to Walgreens since those deal talks, the people said.

Both Rite Aid and Walgreens -- which has about 8,200 stores -- have a major presence in California, New York and Massachusetts, while in other states, including Florida, Texas and Illinois, there isn't any overlap.

The FTC has increased its scrutiny of buyers of divested assets since a high-profile settlement in 2015 quickly went sour. In that matter, the FTC allowed a the acquisition of supermarket operator Safeway Inc. by the owner of rival Albertsons after the companies agreed to sell 168 stores, mostly to a small grocery chain, Haggen Holdings LLC.

Haggen struggled with the expansion and filed for bankruptcy protection in a matter of months. Albertsons eventually bought back some of the stores the government had required it to sell.

For Fred's, the Rite Aid transaction would more than double the size of the Memphis, Tenn., company, which has about 650 stores. It had a market capitalization of about $400 million before it agreed to borrow $1.65 billion to fund its Rite Aid deal. The chain has pledged nearly all its assets as collateral for the loans.

Fred's said Monday it continued to work the FTC as well as Rite Aid and Walgreens to complete its transaction, and it was willing to buy more than 865 stores. The companies haven't disclosed which locations will be sold to Fred's.

At a meeting with investors last week, Walgreens Chief Executive Officer Stefano Pessina said the companies were discussing "all instruments and actions" they could put in place to win approval from the FTC.

Walgreens on Monday lowered its earnings forecast for 2017 due to the deal's delay. The company said in a filing that it now expects adjusted net earnings per share of $4.90 for the year instead of $5.08, since the company won't realize cost savings from the acquisition this year and because it may have to divest more stores.

Write to Austen Hufford at austen.hufford@wsj.com and Sharon Terlep at sharon.terlep@wsj.com

(END) Dow Jones Newswires

January 30, 2017 18:58 ET (23:58 GMT)

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