WBA, which had initially agreed to sell 865 Rite Aid stores to Fred’s, is planning to raise that number and also include distribution centers, software and staff, according to a Bloomberg LP report.
Some senior Rite Aid executives could also go over to Fred’s as part of the WBA-Rite Aid deal, the report noted. It cited Rite Aid’s March 2 filing with the Securities and Exchange Commission that said “some of our executive officers and officers are discussing and/or in the future may discuss or enter into agreements with Fred’s or any of Fred’s affiliates regarding employment with, or service on the board of directors of, or the right to purchase or participate in the equity of, Fred’s or one or more of Fred’s affiliates.”
That possibility could reassure FTC officials about Fred’s ability to remain a viable competitor after buying the Rite Aid stores, a transaction that would make the company the third-largest U.S. drug chain, with 1,219 pharmacies in 1,508 stores. Fred’s currently has 643 discount general merchandise stores (354 with full-service pharmacies) and three specialty-pharmacy-only locations in 15 Southeastern states.
The report noted that in two recent deals approved by the FTC, one of them the merger of Albertsons and Safeway, asset sales made to win regulatory approval ended up not preserving competition as intended.