Regulators Want More Details About Walgreens-Rite Aid Deal

WASHINGTON, DC (AP) – The Federal Trade Commission wants more information about Walgreens' $9.41-billion plan to buy rival drugstore chain Rite Aid, a sign that regulators may be worried about the deal's impact on competition.

         Walgreens said Friday that it fielded a request for additional information beyond what the companies have already been required to provide under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Walgreens said it expected the request.

         A former Justice Department attorney said regulators ask for more information when their initial review of a deal suggests that there are "serious competitive concerns."

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         "I think it's a big deal," said Allen Grunes, who led merger investigations as an antitrust attorney with the Justice Department. Grunes is a co-founder and attorney at the Konkurrenz Group in Washington and is not connected to this case.

         Walgreens said in a brief statement that the companies still expect to close their deal in the second half of next year. Spokesman Michael Polzin declined to comment when asked whether the company has any concerns about the acquisition passing regulatory review.

         Walgreens Boots Alliance Inc. is the nation's largest drugstore chain with 8,173 U.S. stores, while Rite Aid Corp. runs around 4,600. Walgreens said after announcing the deal in late October that the agreement calls for divesting up to 1,000 stores if required by regulators. But the company also said it believes it will probably have to get rid of less than half that number.

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         Grunes said regulators don't take these requests for additional information lightly because they generally cost companies millions of dollars to fulfill. He said they often involve requests for more information on business and pricing plans, contracts with suppliers and customers and documentation of expected savings from a deal, among many other things.

         "It's generally a major undertaking," he said.

         Shares of Deerfield, Illinois-based Walgreens Boots Alliance Inc. fell 2.5 percent, or $2.08, to $81.35 in Friday morning trading, while broader indexes dropped about 1 percent. Shares of Camp Hill, Pennsylvania-based Rite Aid Corp. rose 2 cents to $7.90.

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