Walgreens and Rite Aid have announced a deal for Walgreens to buy 1,932 Rite Aid stores, three distribution centers, and related inventory for $4.375 billion in cash, which has cleared Federal Trade Commission approval. The companies said in press releases that the Federal Trade Commission is working hard to finish their review of Walgreens Boots Alliance’s proposed $9.4 billion acquisition of drugstore rival Rite Aid. The Federal Trade Commission was not convinced that Rite Aid’s footprint across much of the United States would be eliminated.
To assuage antitrust concerns, Walgreens and Rite Aid last month announced that they would abandon their merger. The FTC denied blocking the Walgreens-Rite Aid Merger and stated that it would review the new proposal. Rite Aid said the stores to be sold are mainly in the United States. However, it is risky because it could force the FTC to decide against the merger if it believes its antitrust concerns haven’t been addressed. Walgreens and Rite Aid have Fred’s Pharmacy lined up to buy Rite Aid stores that are expected to be sold should the FTC approve the merger. Both companies have been cooperating with the FTC staff since shortly after the announcement of the proposed acquisition.
Rite Aid’s standley stated that feedback from the regulators led them to believe that the FTC would not approve the consummation of the merger. The Commission did not take any official action with respect to the original Walgreens-Rite Aid merger.
📹 Rite Aid Stock Explodes Higher on Report of FTC Approval for Walgreen’s Acquisition
Rite Aid Stock Explodes Higher on Report of FTC Approval for Walgreen’s Acquisition source …
Is Rite Aid being bought out?
In 2017, Walgreens announced the cancellation of its merger with Rite Aid, offering to purchase 2, 186 stores for $5. 18 billion, plus a $325 million cancellation penalty. A revised deal was made, with Walgreens purchasing 1, 932 locations for $4. 38 billion, approved by the FTC on September 19. The revised sale was completed in March 2018, leaving Rite Aid with around 2, 600 remaining stores. Three distribution centers and related inventory were transferred, and most stores were rebranded as Walgreens.
In February 2018, Albertsons announced plans to acquire the remainder of Rite Aid in a merger of equals, but the plan failed to please shareholders and was cancelled on August 8, 2018. In October 2020, Rite Aid announced the acquisition of Bartell Drugs, a Seattle-area chain, for $95 million, which faced criticism from customers due to staff turnover and computer system glitches.
Who owns most of Walgreens?
Walgreens Boots Alliance (WBA) stock is owned by a mix of institutional, retail, and individual investors. Institutional investors own approximately 44. 24 percent of the company’s stock, followed by 20. 12 percent from insiders and 35. 64 percent from public companies and individual investors. The latest TipRanks data shows that 25. 34 percent of WBA’s stock is held by institutional investors, 20. 12 percent by insiders, and 35. 64 percent by retail investors.
What is the lawsuit against Walgreens stock?
Walgreens is currently facing a lawsuit that alleges that the company misrepresented its operational success to the public from October to June. Additionally, the lawsuit claims that Walgreens overpaid $31. 5 million by repurchasing millions of shares of common stock at an inflated price, thereby breaching its fiduciary duties. Furthermore, Walgreens is currently involved in another federal securities fraud lawsuit in Illinois.
What is the controversy with Walgreens?
Walgreens has been accused of submitting false claims to federal health care programs for prescriptions processed between 2009 and 2020, resulting in tens of millions of dollars in unauthorized payments. The government has imposed a resolution, allowing Walgreens to receive credit under the department’s guidelines for taking disclosure, cooperation, and remediation into account in False Claims Act cases. The company has implemented enhancements to its electronic pharmacy management system to prevent future incidents and self-reported certain conduct.
Walgreens will receive a credit for the $66, 314, 790 refund for the settled claims. The Justice Department’s Civil Division is committed to holding those who abuse federal health care programs accountable.
Is Walgreens in financial trouble?
Walgreens, a major player in the healthcare industry, is facing a financial crisis but experts believe recovery is possible. To achieve this, the company must abandon its retail clinic dreams and focus on improving its core pharmacy business. Walgreens has already begun this journey by closing 160 of its VillageMD primary care clinics. Stephanie Davis, senior equity research analyst at Barclays, believes that while Walgreens is taking strategic steps, the company faces challenges in the macro backdrop and profitability headwinds in the US retail pharmacy sector, which may overshadow execution. She has given Walgreens an underweight or sell rating on the stock.
Why is Walgreens losing money?
Walgreens, a retail pharmacy chain, has faced challenges due to reduced revenue from prescription drugs and staffing shortages, largely due to competition from Amazon’s online pharmacy business. The company’s share price has also fallen since announcing a controlling stake in VillageMD worth $5. 2 billion in 2021. The company reported a $6 billion charge earlier this year due to the declining value of its investment, and plans for a divestment are still being finalized.
What is the Walgreens pay scandal?
Walgreens has agreed to pay $106 million to settle lawsuits alleging it submitted false payment claims to government health care programs for prescriptions that were never dispensed. The settlement resolves lawsuits filed in New Mexico, Texas, and Florida on behalf of three people who worked in Walgreens’ pharmacy operation. The lawsuits were filed under a whistleblower provision of the False Claims Act, allowing private parties to file cases on behalf of the US government and share in the recovery of money. Walgreens cooperated in the investigation and improved its electronic management system to prevent such problems from occurring again.
What is the Rite Aid scandal?
Rite Aid, founded in 1962 as Thrift D Discount Center, faced an accounting scandal in 1999 when it began restating earnings due to accounting irregularities. Six former Rite Aid senior executives were convicted of conspiracy in 2003 for accounting fraud and false filings with the SEC. The company changed its name to Rite Aid Corporation in 1968 and moved its stock to the New York Stock Exchange in 1970.
Rite Aid’s growth was marked by acquisitions like Envision Pharmaceutical Services in 2015 and two merger deals with Walgreens and Albertsons. Former Rite Aid executives admitted to overstating net income between 1997 and 2000.
What happened to the Walgreens Rite Aid merger?
In 2015, Walgreens attempted to buy Rite Aid for $17. 2 billion, but the deal fell through due to the Federal Trade Commission’s refusal to approve it. In June 2017, Walgreens canceled the merger and bought 42 of Rite Aid’s stores for $4. 38 billion. A recent lawsuit accuses Walgreens Boots Alliance of downplaying antitrust regulator scrutiny, with the settlement still requiring approval from a federal judge in Pennsylvania.
Who did Walgreens buy out?
Walgreens Boots Alliance, Inc. (WBA) is an American multinational holding company that owns retail pharmacy chains Walgreens in the US and Boots in the UK, as well as several pharmaceutical manufacturing and distribution companies. The company was formed in December 2014 after Walgreens bought a 55-stake stake in Alliance Boots for $4. 9 billion in cash and 144. 3 million common shares with a fair value of $10. 7 billion. Walgreens had previously purchased 45 shares for $4.
0 billion and 83. 4 million common shares in August 2012 with an option to purchase the remaining shares within three years. As of 2022, Walgreens Boots Alliance is ranked 18 on the Fortune 500 rankings of the largest United States corporations by total revenue. In fiscal year 2022, the company saw sales of $132. 7 billion, up 0. 1 from fiscal 2021, and net earnings increase to $4. 3 billion. The company began trading on the NASDAQ in December 2014 and was replaced by General Electric on the Dow Jones Industrial Index in June 2018. It is also a component of the S and P 500 index and was formerly a Nasdaq-100 company until 2024.
📹 Walgreens forcing FTC’s Hand On Merger
Walgreens Boots Alliance officially set in motion a clock designed to force the Federal Trade Commission to make a decision on …
The deal is certainly in doubt. First, opinion is growing that Walgreens is overpaying for Rite Aid. Rite Aid has not been performing well meaning Walgreens will need to pour a ton of money into fixing the company once they buy it for more than its worth to begin with. Finally, the company they found two buy the stores they’re being forced to divest (Fred’s) is a small company that has to take on a great deal of debt and risk in order to almost triple its size once it completes buying the stores Walgreens doesn’t want. It also won’t be strong enough to compete properly against CVS and Walgreens meaning no new real competition is being created. The chances of Fred’s of Fred’s succeeding and not going under in five years are slim to none. The FTC should reject the merger and Walgreens would be smart to cancel it anyway.