Senators call for scrutiny of Walgreens-Rite Aid deal

Wed Oct 28, 2015 6:43pm EDT
 
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By Sruthi Ramakrishnan and Diane Bartz

(Reuters) - Two influential U.S. senators called for close scrutiny of Walgreens Boots Alliance Inc's (WBA.O: Quote) plan to buy Rite Aid Corp (RAD.N: Quote) for $9.4 billion, a deal that would unite two of the three biggest U.S. drugstore chains.

Walgreens Chief Executive Stefano Pessina said the company had analyzed the antitrust aspect of the deal but would not speculate on the number of drugstores it might need to divest in order to win regulatory approval.

Walgreens ranks first and Rite Aid third by number of stores, either side of CVS Health Corp CVS.N.

The top two antitrust lawmakers in the U.S. Senate on Wednesday urged antitrust enforcers to give the plan careful scrutiny because of the importance of healthcare in the U.S. economy.

"I have fought tirelessly to promote competition in the health sector and I believe the proposed merger of two of the three largest drug store chains in the country raises serious issues," Senator Amy Klobuchar, the top Democrat on the Senate Judiciary Committee's antitrust subcommittee, said in a statement.

The subcommittee's chair, Republican Senator Mike Lee, said he hoped antitrust agencies would "closely scrutinize" the deal.

Several analysts and antitrust lawyers said the deal would probably pass regulatory muster provided some stores were divested, especially in the northeastern United States, where Walgreens and Rite Aid stores overlap by more than 25 percent.

Walgreens shares closed down 10.7 percent on Wednesday. They had risen 7 percent on Tuesday after reports emerged that a deal was imminent.   Continued...

 
People walk by a Walgreens store in Pasadena, California December 20, 2013.  REUTERS/Mario Anzuoni