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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

Finance

Finance

Walgreens Hits Wall With Rite Aid Merger

Walgreens’ acquisition of Rite Aid doesn’t seem to be going according to plan. Walgreens has yet to gain U.S. antitrust clearance from Federal Trade Commission (FTC) officials.

The FTC’s lawyers don’t seem too convinced of the Walgreens’ idea to sell 865 of its stores to Fred’s then take over Rite Aid. The hesitation on the deal also worries investors who are more than optimistic about the transaction. Yet Walgreens offer of $9 a share has dropped to $2.57.

The merger of Walgreens and Rite Aid is estimated at $9.4 billion. This would bring Walgreen past CVS Pharmacy, currently the number one pharmaceutical company in the United States.

But for some reason, the FTC has been dragging its feet. There’s a slight possibility that this could be due to the Trump administration’s recent takeover. There will be three positions to fill including the chairman’s seat. Edith Ramirez recently announced that she will step down as chairwoman come February 10th.

Although it isn’t clear who will replace these vacant seats, there is also no way to tell how the Trump administration will follow through. While the Obama administration was in power, the FTC tried to make sure that mergers were always in benefit of the consumer.

One of the jobs of the FTC is to make sure that the buyer’s assets can bring back competition. That hasn’t always been the case. For example, the FTC allowed the acquisition of Hertz’s business Advantage Rent A Car by another company. Not long after the company obtained Advantage, Advantage had to file for bankruptcy.

The CFO of CVS stated at a conference that he doesn’t believe Fred’s will be feasible competition in the foreseeable future.


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