The Law Office of Lynnette Ariathurai A Professional Corporation

Business merger date for Walgreens/Rite Aid deal pushed back

Shares of Rite Aid drug store stock recently took a nosedive according to recent trade data. Some California readers might be closely following news regarding a takeover of Rite Aid by another drug store giant, Walgreens. Apparently, there have been some changes in the proposed business merger, some of which the Federal Trade Commission is reportedly not too happy about.

The initial business merger offer included Walgreens saying it would pay $9 per share, estimating Rite Aid's store value at approximately $9.4 billion. On a recent Monday, however, a statement offered jointly by both companies said that price is being chopped to one that would lower the overall value nearly $3 billion. Walgreens has informed the Federal Trade Commission of its willingness to sell as many as 1,200 stores once the deal is secured.

The problem with that idea seems to be that there is only one prospective purchaser for more than 800 of those stores, Fred's drug stores. The FTC has stated that it is concerned there is not enough diversity in the proposed sales to maintain a competitive environment in the drug store industry. As of now, the Walgreens/Rite Aid deadline has been pushed back to the end of July 2017. 

Many in California and beyond are waiting to see if Walgreens wins the antitrust approval needed to acquire Rite Aid stores, thus expanding its own empire even more. Although a delay is not that uncommon in a business merger of this size, most sellers and buyers want to resolve such issues quickly because to them, time is money. A business and commercial law attorney can serve as a valuable advocate to overcome proposed merger delays.

Source: The New York Times, "Walgreens and Rite Aid Cut Price Of Merger", Michael J. de la Merced, Jan. 30, 2017

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