Walgreens Boots Alliance Inc. has announced that it will buy competitor Rite Aid Corp. for
over $9 billion in a deal that unites the second and third largest drugstore chains in the United States. This is another in a series of high profile deals that have altered the landscape of the healthcare and pharmaceutical industries.

 

Walgreens has been very aggressive in the acquisition market. In the last five years, it has taken over Rite Aid, Duane Reade, and European pharmacy chain Boots Alliance.

 

 

The deal is facing intense scrutiny from Congress because of its potential to violate antitrust laws. Minnesota Senator and member of the Senate’s antitrust subcommittee Amy Klobuchar said, “I have fought tirelessly to promote competition in the health sector, and I believe the proposed merger of two of the three largest drugstore chains in the country raises serious issues.”

 

In order to adhere to antitrust regulation, Walgreens may need to close a significant number of stores in certain parts of the country. The merger with Rite Aid will double Walgreens footprint in 14 states and increase the drugstores total number of stores to 13,000 nationally. Main rival CVS only as 8,000 locations nationwide. Despite having less locations, CVS is the market leader in the pharmacy/drugstore sector with 58.1 percent of the market share based on revenue. Walgreens and Rite Aid combine for 41.3 percent of the market.

 

Will lawmakers overturn Walgreens acquisition of Rite Aid? Will the acquisition allow Walgreens to surpass CVS? Feel free to leave a comment or find me on Twitter @Andrew_Morse4