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Walgreens' Rite Aid acquisition attracts antitrust scrutiny

Walgreens' Rite Aid acquisition attracts antitrust scrutiny

Antitrust regulators are taking a hard look at Walgreens Boots Alliance Inc.'s proposed $17.2 billion acquisition of rival drugstore chain Rite Aid Corp.

Deerfield, Illinois-based Walgreens and Camp Hill, Pennsylvania-based Rite Aid, which agreed to be acquired by Walgreens in late October, each received a second request for information from the Federal Trade Commission, the companies said Friday in a joint statement.

According to the FTC, a second request is issued when the agency needs more information to assess the deal, such as data on the likely effects of the merger, the companies' products and services, and market conditions where each company does business.

Both companies said they have been cooperating with the FTC, and still expect the deal to close in the second half of 2016, according to the statement.

The Walgreens-Rite Aid deal would create the largest pharmacy chain in the U.S. with about 13,000 stores, easily trumping the second largest U.S. pharmacy chain CVS Health Corp., which has about 7,900 stores.

The deal also includes Rite Aid's small pharmacy benefit manager Envision Pharmaceutical Services, giving Walgreens a second shot at the PBM game, should the firm decide to invest in Envision. Walgreens previously exited the PBM space in 2011 when it sold its PBM unit to Catalyst Health Solutions Inc.

In addition to securing FTC approval, the Walgreens-Rite Aid transaction still needs approval from Rite Aid's stockholders.

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