FTC could squash proposed acquisition by Walgreens

In Business Organizations by Coolidge Wall

The decision to acquire another company is not one that should ever be made lightly, as this type of transaction can affect both companies involved, consumers, employees, stockholders and investors. The Federal Trade Commission certainly doesn’t take these transactions lightly, and in fact, it has been stopping some high-profile purchases in recent months.

However, pharmacy giant Walgreens is hoping that its most recent proposed acquisition will make it past the FTC. According to reports, Walgreens is looking to buy Rite Aid, another chain of pharmacies, for about $9.4 billion.

Interested parties are cautious, however, because the proposed acquisition is expected to come up against some serious issues that are likely very similar to those that companies right here in Ohio face.

Primarily, without selling, closing or otherwise getting rid of some of the locations, the new Walgreens and Rite Aid company would have over 5,000 more locations than the next market rival, CVS Health. The FTC could stop the acquisition if it believes the resulting marketplace would be too narrow.

However, Walgreens plan to potentially close 1,000 stores could appease the FTC by shrinking their market presence. This could prevent impressions that the deal is anti-competitive.

While many acquisitions and mergers go through without a hitch from the FTC, higher-profile companies and transactions can be under more scrutiny. This is why it can be crucial that these deals are thoroughly examined and meticulously planned.

When companies are going through or anticipating ownership and organizational changes, it is crucial that business owners are prioritizing proper operations practices and standards. In order to do this, it is recommended that they consult an experienced business law attorney. Failure to do so could leave businesses exposed to legal complications and challenges that ultimately put a company’s future in jeopardy.

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