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Walgreens-Rite Aid merger: No from Kroger?

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Apparently, Kroger might not become the enabler for Federal Trade Commission approval of the Walgreens-Rite Aid merger.

The New York Post reported late Tuesday that Kroger may be taking a pass on buying Walgreens and/or Rite Aid stores that would need to be divested by Walgreens Boots Alliance to gain FTC clearance for its $17 billion agreement to acquire Rite Aid.

Citing anonymous sources, the Post article said the FTC was insisting that the divested locations remain stand-alone drug stores, rather than integrating their operations into a nearby Kroger Co. supermarket (presumably that means a Kroger in-store pharmacy acquiring the drug stores’ prescription customer files).

The Post had reported late last month that a block of 650 stores ticketed for divestiture by WBA-Rite Aid didn’t generate enough interest from private equity firms.

Kroger’s name had recently emerged in media reports as a possible suitor for Walgreens-Rite Aid stores.

When WBA and Rite Aid announced the acquisition deal last fall, the companies cited by industry analysts as the likeliest buyers of divested stores were CVS Health and Walmart. However, Walmart has scaled back its small-format strategy, and reports said CVS has expressed concerns about cannibalization if it were to purchase some of its rivals’ locations.


ECRM_06-01-22


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