What the Walgreens-Rite Aid Mega-Merger Could Mean for You

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If the $17 billion purchase gets a green light from regulators, the drugstore industry will essentially be consolidated into two big chains.

Walgreens, the largest pharmacy chain in the United States, plans to pony up a whopping $17.2 billion to purchase rival Rite Aid.

The deal would create a massive pharmacy chain with 13,000 stores and annual revenues topping $100 billion, Forbes reports. By comparison, CVS, the second largest drug retailing chain in the country, has about 7,800 stores, though it controls nearly 58 percent of pharmacy market share, based on revenue.

“[This] is another step in Walgreens Boots Alliance’s global development and continues our profitable growth strategy,” Walgreens Boots Alliance CEO Stefano Pessina said in a statement. “In both mature and newer markets across the world, our approach is to advance and broaden the delivery of retail health, well-being and beauty products and services.”

(Walgreens Boots Alliance is a U.S-based multinational holding company that includes a 55 percent stake in Switzerland-based Boots Alliance and has pharmaceutical manufacturing, wholesale and distribution operations across 25 countries.)

Boards from both companies have approved the pharmacy mega-merger, but it still needs the green light from antitrust regulators before it can proceed.

In an effort to limit Walgreens from controlling more than 50 percent of the nation’s chain drugstores, it’s possible that regulators could force Walgreens to sell off hundreds of stores, Forbes said.

Consumers’ wallets could take a hit from the Walgreens-Rite Aid merger, warns Philly.com columnist Joseph DiStefano. “Customers can expect less competition and higher prices,” he writes.

Customers may also see name changes, a reduction in brand choices and possible store closures, the Associated Press reported.

“They also may see more clinics in Rite Aid Corp. stores and more products like vitamins and supplements aimed at keeping them healthy, as the sector continues to stretch well beyond simply filling prescriptions,” the AP said.

Earlier this year, CVS paid $1.9 billion to acquire nearly 1,700 Target pharmacies.

What do you think about the proposed merger of two of the nation’s biggest drugstore chains? Share your comments below or on our Facebook page.

Stacy Johnson

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