Walgreens gives FTC ultimatum on Rite Aid merger
The move is essentially an ultimatum, letting antitrust regulators
know that the companies consider the information and actions they’ve
taken to gain approval for its proposed merger with rival Rite Aid to be
sufficient and complete. The FTC has 60 days to respond.
Walgreens Boots CEO Stefano Pessina has been adamant about carrying through with the merger. If it is scuttled, Pessina told analysts in January that the company had “no plan B.” Later that month, at Walgreens’ shareholders meeting, he said the organization was “actively engaged in dialogue with the FTC” and declared “We’ll do anything we can to support their work.”
But that attitude may have run its course. This ultimatum gives regulators two months to decide one way or another, finally capping off a process that has dragged for close to 18 months. But it’s risky, because it could force the FTC to decide against the merger if it believes its antitrust concerns have yet to be adequately addressed.
In his statement, Rite Aid Chairman and CEO John Standley noted that the retailer’s teams “did a tremendous amount of work to deliver to the FTC the information to substantially comply with the Second Request.
While investors are mostly demonstrating patience, some observers aren’t all that sanguine about the deal’s prospects, considering the antipathy the FTC showed against mega-mergers, including deals involving retailers, at least in the Obama era. Last May, for example, regulators halted a proposed $6.3 billion tie-up between Office Depot and Staples, despite Amazon’s entry into the office supplies retail and business contracts spaces.
A spokesman from Fred’s told Retail Dive earlier this year that
the company is in a good position and is also working closely with the
Source: Retail Dive