FTC challenges Rite Aid acquisition

Executive Summary

Rite Aid must divest approximately 23 pharmacies to ensure compliance with federal trade regulations in the wake of the retailer's recently announced $3.5 bil. acquisition of Eckerd and Brooks pharmacies from Canada's Jean Coutu Group, FTC says in a June 4 consent agreement. The deal gives Rite Aid 1,854 more stores and six distribution centers, making it the largest drugstore chain on the East Coast and the third largest in the U.S. However, the acquisition, minus the sell off, would create an anticompetitive market climate as sales by both parties, Rite Aid and Eckerd/Brooks, account for at least half of all pharmacies in the 23 local markets identified by FTC. The stores will be sold to Kinney Drugs, Medicine Shoppe, Walgreens, Big Y and Weis Markets. FTC voted 5-0 to approve the consent agreement and order, and a 30-day public comment period is open until July 28...