Despite wide reports about the shortage of good retail real estate out there, it seems Walgreens is having a hard time selling off the stores it needs to before its merger with Rite Aid can go through.
Walgreens Boots Alliance — in order to meet regulatory requirements for its $17 billion merger with Rite Aid — must either sell off or close down up to 1,000 stores (the exact count is actually 650). Walgreens would like to go with the sale option, but it seems it is having a hard time finding buyers. NY Post reports indicate that private equity is taking a pass because the locations up for sale don’t rank as high-quality prospects.
CVS and Walgreens have met jointly with the FTC to explore the possibility of CVS picking up a few stores in areas where it is not in direct competition with Walgreens, though sources report Walgreens prefers to sell the whole allotment to a single buyer if possible.
No matter the outcome, it seems the Walgreens/Rite Aid merger is on track to create the largest drugstore operation in the U.S. with 46 percent marketshare. Given that reality, some are saying CVS might up its offer and buy more than “some” Walgreens stores, though others note the locations of the divested stores make that seem unlikely.
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