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Walgreen wants to force FTC’s hand on Rite Aid deal

May 1, 2017

Walgreen is likely to push federal regulators to the brink in its long battle for regulatory approval to buy Rite Aid.

The chain about a month ago gave the Federal Trade Commission 30 days’ notice it was going to certify compliance — a notification that a merger applicant believes it has supplied all the information regulators need to make a decision on the deal.

Walgreen is expected to certify compliance within days, two sources close to the situation said. In doing so, Walgreen will give the FTC 90 days to either clear the $9.7 billion deal, creating the nation’s biggest drug store chain, or sue to block it, a source said.

The certified compliance period would expire roughly the same day as the Walgreen-Rite Aid merger agreement terminates on July 31. The deal was announced in October 2015.

The Post reported exclusively on  March 30 that Walgreen was setting a roughly three-month deadline for the FTC to make a decision. Walgreen has given it a little longer, or around four months.

FTC staff has been preparing to sue to block the merger, believing Walgreen’s divestiture proposal does not do enough to restore competition in areas where Walgreen and Rite Aid are dominant. Walgreen has proposed selling 865 Rite Aid stores to regional money-losing chain Fred’s Inc.

Rite Aid shares mid-day were trading at $4, well below Walgreen’s agreement to pay between $6.50 and $7 a share, dependent on the number of stores divested.

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