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Rite Aid Tanks As Merger With Walgreens Said To Be Facing Antitrust Concerns

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Rite Aid Tanks As Merger With Walgreens Said To Be Facing Antitrust Concerns

Shares of Rite Aid Corporation (NYSE: RAD) plunged lower by nearly 20 percent late Friday morning following a Bloomberg report that the company's proposed acquisition by Walgreens Boots Alliance Inc (NASDAQ: WBA) may be in jeopardy.

As part of Walgreen's proposed acquisition of Rite Aid, the two pharmacy chains agreed to sell hundreds of retail units to Fred's, Inc. (NASDAQ: FRED). The two pharmacy chains believed that doing so would ease competitive and regulatory concerns.

Fred's purchase of hundreds of stores implies it has transformed from a dollar store to a bonafide national pharmacy chain and a long-term viable competitor in the space with a national footprint.

According to Bloomberg, Walgreens is said to be facing U.S. antitrust concerns for its acquisition.

Walgreens shares lost nearly 2 percent, while Fred's lost more than 6 percent.

As noted by Drug Store News, the proposed acquisition is set to expire on January 27 if it's not fully approved, but some investor had expected the deal to be approved on Friday.

"[The decision] won't happen [on Inauguration Day]," Betsy Lordan, senior public affairs specialist for the Federal Trade Commission told DSN in an email. "More generally, however, we do not confirm or comment on merger investigations until/unless we are announcing legal action such as a complaint or (in some cases) a complaint and proposed settlement."

All of the companies could not be immediately reached for comment.

Rite Aid traded recently at $7.68, down 10 percent.

Image: Mike Mozart, Flickr

Posted-In: Freds Pharmacy Chain retailersM&A News Rumors Legal Movers Best of Benzinga

 

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