Rite-Aid - Walgreens merger finally happening?

I’ve been watching this for a long time. Walgreens (WBA) got shareholder approval to buy Rite-Aid (RAD) for $9 a share quite some time ago. RAD share price has fluctuated between roughly $7 and $8, because of doubts that the FTC would approve of the merger. Wlagreens has given positive news for a long time, saying that it’s working out selling off stores to satisfy antitrust requirements, but still the price of RAD has remained depressed.

The latest good news moved the stock up today almost 6%:


"Walgreens Signals FTC OK For Rite Aid Deal Near; Stock Breaks Out

"Walgreens said it is “exploring potential divestiture remedies” as talks continue. It expects the retailers will have to sell more than 500 stores combined but fewer than 1,000. The retailers had originally expected having to sell less than 500 stores, but their deal allowed for divestitures of up to 1,000 stores.

Walgreens still expects the $17.2 billion, $9-a-share deal to close in the second half of the year."

This isn’t the first time that RAD shares bumped up on optimism.

So this isn’t the usual check-the-numbers exercise; it’s more of looking at the chances for the merger to go through. For me, the main cause for optimism is Walgreens’s work on divesting enough stores.

In an interesting twist, there’s been at least one article looking at another company I hold, Kroger, buying up some of these stores to strengthen its pharmacy presence.

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