Walgreens Tumbles on Costly Global Deal (Update 1)

In March, Credit Suisse analyst Edward Kelly said that a Rite Aid acquisition would help Walgreen push against drugstore competition by pharmacy benefits managers like CVS Caremark and Express Scripts, which completed a $29 billion 2011 acquisition of Medco Health Solutions(MHS) .

Tuesday's deal counters those expectations and Walgreens previous M&A history, as it shifts its strategy internationally. In 2010, Walgreen spent $1.1 billion to buy New York-based drug-store chain Duane Reade from private equity firm Oak Hill Capital and was a bidder for Longs Drug Stores, another U.S. chain that was eventually bought by CVS Caremark.

For more on investing in drug stores and pharmacy giants see why Rite Aid's earnings overtake deal hopes and why Express Scripts could be sandbagging synergies.

-- Written by Antoine Gara in New York