In fact, the fascination is unlike anything yours truly has seen in terms of retail deals outside, of course, for Amazon's (AMZN) - Get Reportblockbuster Whole Foods (WFM) bid. By most accounts, the deal has a strong likelihood of getting approved, TheStreet reports. It's helpful to revisit what this combined company would look like, because it explains the intense interest by investors.
The combined company would be a drugstore retailing monster, operating more than 11,000 (1,000 stores will be unloaded to drugstore Fred's (FRED) ) locations in the U.S. and filling more than 1 billion prescription drugs each year. A merged Walgreens and Rite Aid would have an especially commanding presence in California and New York, operating more than 1,000 stores. Walgreens would also be able to beef up in Rite Aid's second-largest market, Pennsylvania, where it operates over 500 sites compared to Walgreens' more than 130 stores.
The tie-up would pose a serious threat to CVS Health (CVS) - Get Report , which operates more than 8,300 locations across the U.S. It would also bring New York City's drugstore icons in the Rite Aid and Duane Reade brands under the ownership of Walgreens. Walgreens acquired Duane Reade for about $1.1 billion in 2010. Of course, Walmart (WMT) - Get Report should be terrified of the drug-selling monster, as should Target (TGT) - Get Report which is still struggling to get people to visit its new CVS shops inside its stores. As for Sears Holdings Corp. (SHLD) , it could damn near forget about those stragglers coming into Kmart for pills -- they will probably be headed to Walgreens.
A true monster indeed. But as TheStreet's Michael Brown points out, a monster that may end up in the hands of Amazon.
Rite Aid's shares rose 6.7% to $3.99 in post-market trading on Wednesday. Walgreens' stock was down 0.2% to $77.10.
What's Hot On TheStreet
Another bank is bullish on Alibaba: J.P. Morgan initiated Chinese e-commerce giant Alibaba (BABA) - Get Report with an overweight rating and $190 price target in a new note Tuesday, representing more than 30% growth over Monday's closing price of $142.73. In J.P. Morgan's eyes, Alibaba is entering a transformation from a pure play e-commerce company to a data-driven beast that stands to power its bottom line more than most expect.
"We believe Alibaba's core commerce is expanding from traffic monetization to data monetization and such trend will quickly expand to its media/cloud businesses," writes J.P. Morgan analyst Alex Yao. "Such expansion not only allows Alibaba to tap into non-transaction-based corporate budget (e.g., market research, brand awareness, and customer service), but also supports our investment thesis based on sustainable revenue/earnings growth."
Costco has an opportunity here: Costco (COST) - Get Report recently opened a store in Paris, TheStreet's Lindsay's Rittenhouse reports. The new store is likely one of many to come for Costco in Europe, where it only has 32 stores.
A key Walmart business springs back to life: Walmart (WMT) - Get Report is starting to see long-awaited sales growth at its U.K. Asda division as Brits shift their shopping habits towards food purchases with a slump in consumer confidence and surging inflation, TheStreet's Lisa Botter reports. Sales at Asda rose by 2.2% for the 12-weeks ended June 18, well ahead of the 0.9% pace notched in the 12 weeks to May 21, according to new data from research firm Kantar.
Different strategies emerge in driver-less cars: Alphabet Inc.'s (GOOGL) - Get Report deal with rental car giant Avis Budget Group Inc. (CAR) - Get Reportto have Avis manage some self-driving test cars developed by Alphabet's Waymo unit and Fiat Chrysler (FCAU) - Get Report feels a little overblown, writes TheStreet's Eric Jhonsa. The deal only covers test cars deployed in one metro area (Phoenix, Ariz.), and isn't exclusive, Jhonsa points out.
Meanwhile, Apple Inc.'s (AAPL) - Get Report deal with Avis rival Hertz Global Holdings Inc. (HTZ) - Get Report feels even smaller. Apple, which has reportedly been testing a half-dozen self-driving cars around the San Francisco Bay Area, is just leasing a small number of Lexus RX450h SUVs from Hertz, with the idea of retrofitting them with self-driving test systems.
The Queen is getting paid: The Queen of England is set to get a nice 8% increase from public funds, reports the BBC. A government official is quoted as saying the Queen represented "excellent value for the money." Hard to argue with that as the lady is a machine.
(This article originally appeared on Real Money, our premium site for active traders. Click here to get great columns like this from Brian Sozzi, Jim Cramer and other writers even earlier in the trading day.)
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