Raia Drogasil : Material Fact - Onofre Acquisition

RAIA DROGASIL S.A.

CNPJ/MF nº 61.585.865/0001-51

NIRE nº 35.300.035.844 Publicly-held Company

Category A

NOTICE OF MATERIAL FACT

RAIA DROGASIL S.A., a stock company registered as a publicly-held company before the Securities and Exchange Comission (Comissão de Valores Mobiliários - "CVM"), with headquarters in the City of São Paulo, State of São Paulo, at Avenida Corifeu de Azevedo Marques, 3.097, Butantã, zip code 05339-900, registered with the National Corporate Taxpayer Registry of the Ministry of Finance ("CNPJ/MF") under No. 61.585.865/0001-51 and registered with the Board of Trade of the State of São Paulo under Company Identification Number (NIRE) No. 35.300.035.844 ("Company"), pursuant to Article 157, §4º, of Law No. 6,404, dated December 15, 1976, as amended ("Brazilian Corporations Law"), and CVM Instruction No. 358, dated January 3rd, 2002, as amended, informs to its shareholders and to the market in general that, on the date hereof, it has entered into a Sale and Purchase Agreement with CCI Foreign, S.à r.l. and Beauty Holdings, L.L.C. (jointly, "Sellers") and CVS Pharmacy, Inc. ("Guarantor"), by which the Company undertook to purchase quotas representing 100% (one hundred per cent) of the capital stock of Drogaria Onofre Ltda. ("Onofre" and "Acquisition").

Onofre had gross revenues of R$479.4 million in 2018 and has a total of 50 stores, out of which 47 are located in the state of São Paulo, two in the state of Rio de Janeiro and one in the state Minas Gerais. Onofre, currently controlled by CVS Health Corporation, is one of the most recognized companies in the Brazilian retail pharmacy segment and a national leader in e-commerce.

In accordance with the Sale and Purchase Agreement, CCI Foreign, S.à r.l., CVS Pharmacy, Inc. or their affiliates shall be responsible for the conduction and shall hold the Company and Onofre harmless of any and all losses that may arise from the resolution of the arbitration proceeding No. 17/2016/SEC4 currently in progress before the Center for Arbitration and Mediation of the Chamber of Commerce Brazil-Canada.

After due analysis of the terms of the Sale and Purchase Agreement, the Company has concluded that the Acquisition is not qualified within the requirements and parameters set forth in Article 256 of the Brazilian Corporations Law, and therefore will not be subject to approval by the General Shareholders Meeting of the Company or give rise to withdrawal rights to its shareholders.

The Acquisition is subject to the satisfaction of certain conditions precedent which are customary in transactions of this nature, in particular the approval by the Brazilian Antitrust Authority (Conselho Administrativo de Defesa Econômica - CADE). We will keep the shareholders and the market informed about the satisfaction of this and the other conditions precedent, as well as of the closing of the Acquisition.

São Paulo, February 26, 2019

Eugenio De Zagottis

Corporate Planning and Investor Relations Officer