Walgreens Tries to Avoid Another FTC Ordeal

Walgreens Boots Alliance Inc. (WBA) and Rite Aid Corp. (RAD) are still hoping to avoid another lengthy go-round with the Federal Trade Commission as they seek antitrust approval for the "Plan B" they unveiled after canceling their merger on June 29.

On Thursday, Aug. 17, the pharmacy retail chains said they voluntarily pulled and refiled their antitrust notification with the FTC plans for Walgreens to buy 2,186 Rite Aid stores for $5.2 billion.
Rite Aid shares dropped 1.98%, or 5 cents, to $2.23 and Walgreens fell 37 cents, or 0.46%, to $80.89.

Refiling antitrust an application gives the commission an extra 30 days to review the transaction without issuing a more burdensome second request for information and is a common maneuver when merging parties that believe they can address a few competition concerns without undergoing lengthy negotiations before regulators.

Previously the FTC's deadline for deciding whether to issue a second request was August 18. The commission now has until September 18.

Avoiding another long examination is critical to putting the long saga of their would-be deal behind the companies and letting them focus on their respective futures. Their $15 billion plan to merge, which they terminated after it became clear the commission would not approve an outright combination, was under review for 22 months. 

The much smaller asset purchase they are now attempting should not raise the kinds of concerns the commission had about the original merger, they argue. That plan called for Walgreens to buy roughly 3,600 Rite Aid stores and spin off roughly 1,000 other Rite Aid locations to Fred's Inc. (FRED) .

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