Drugstore chain Walgreens Boots Alliance Inc (WBA.O) said it would likely have to divest between 500 and 1000 stores, more than its previous estimate, to win regulatory approval for its planned acquisition of Rite Aid Corp (RAD.N).
Walgreens, the largest U.S. drugstore operator, had earlier estimated it would have to sell not more than 500 stores to win the approvals.
The company operated 8,208 locations or 8,199 drugstores as of May 31.
Rite Aid shares rose as much as 7 percent to touch $8.30, the stock's highest level since the deal was announced in October. Walgreens shares were up about 2 percent at $84.46.
Analysts viewed the divestiture as positive for the deal. Evercore ISI analyst Ross Muken said Thursday's announcement brings "additional confidence that the transaction is on track to close".
Walgreens offered to buy smaller peer Rite Aid in a $9.4 billion deal that would increase its U.S. footprint and give it scope to negotiate for lower drug costs.
Walgreens said it continues to expect the acquisition to close in the second half of this year and to realize synergies of over $1 billion within three to four years after that.
The drugstore operator said it continues to expect the deal to add to its adjusted earnings in the first full year after closing, after taking into account costs related to the divestitures.
(Reporting by Jessica Kuruthukulangara and Sruthi Shankar in Bengaluru; Editing by Savio D'Souza and Shounak Dasgupta)