Sign In
Upcoming Event
Free Newsletter
Is Kroger’s reluctance bad news for Rite Aid sale?
Roger DuPuis//October 19, 2016//
Listen to this articleAccording to Reuters, a source told the news outlet that Kroger Co., the would-be buyer, was informed by the Federal Trade Commission (FTC) that it would not be allowed to close and integrate any Rite Aid stores near Kroger locations.
Illinois-based Walgreens Boots Alliance last October last year unveiled a $9-per-share proposal to acquire Cumberland County-based Rite Aid.
Key to closing the deal, observers have said, is for Walgreens to shed stores to meet the FTC’s antitrust concerns.
In July, Walgreens CEO Stefano Pessina, said in an investors conference call that he expected the combined company would only have to divest about 500 stores to satisfy regulators’ antitrust concerns. In September, the company announced the number would be between 500 and 1,000 “in order to expedite the process.”
Walgreens, the nation’s top pharmacy chain, has about 8,200 stores nationwide. Rite Aid — No. 3 in the nation, behind CVS — has 4,550 stores in 31 states and the District of Columbia. More than 70 of Rite Aid’s stores are in the midstate, where there are only a handful of Walgreens stores.
Cincinnati, Ohio-based Kroger “had indicated to Rite Aid it had an interest in buying some of the divested stores,” the source told Reuters.
Kroger and Walgreens have declined to comment, the Reuters report added. A Walgreens spokesman confirmed to CPBJ that the company isn’t commenting on media reports.
What they’re saying
Here’s what other outlets are reporting about the latest development:
• Business Insider notes that Rite Aid shares have been sliding today after a New York Post report indicated that Kroger may no longer be interested in acquiring 650 drugstores. Rite Aid stock (NYSE: RAD) was at $6.72 this afternoon, down from a $6.83 opening price today.
• The New York Post’s report cited sources who said Kroger entered the picture after several private equity firms had passed on the stores, finding they were too spread out to be profitable as a group.
