Shares of Fred’s Inc. FRED 4.23% are skyrocketing more than 77 percent on Tuesday following the company’s announcement that it has acquired 856 Rite Aid Corporation RAD 0.59% stores for $950 million in cash.

Obviously the market believes Fred’s got a good deal on the assets, and shares jumped to new 10-year highs following a brief trading halt Tuesday morning.

The Rite Aid deal would make Fred’s the third-largest drug store chain in the U.S. behind only Walgreens Boots Alliance Inc WBA 0.01% and CVS Health Corp CVS 0.44%. The asset divestiture is part of the potential $9.4 billion merger between Walgreens and Rite Aid.

Back in October 2015, Walgreens agreed to buy Rite Aid for $9 per share. However, the market has been extremely skeptical that regulators would allow the merger on antitrust grounds. Now that Rite Aid has dumped nearly 900 stores, the deal seems much more likely to be approved.

Not only did Fred’s seem to get a great price on the store, Rite Aid shareholders are now one step closer to that $9/share buyout. While Fred’s shareholders are the big winners, Walgreens shares are…

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