The drug store chains’ merger is under scrutiny from key U.S. Senators.
Just last year, U.S drugstore giant Walgreens merged with the UK leader Alliance Boots, forming Walgreens Boots Alliance Inc. Now Walgreens wants to get even bigger with another major acquisition.
But the company’s proposed deal to purchase competitor Rite Aid is already drawing scrutiny from two key U.S. Senators who have concerns about the antitrust issues the deal raises. Walgreens is the top drug store chain in the country, with Rite Aid the number three chain, according to Reuters.
Senator Amy Klobuchar, the leading Democrat on the Senate Judiciary Committee’s antitrust subcommittee, and Republican Senator Mike Lee, who chairs the committee, are both anti-trust lawyers. Both have stated they believe the merger raises serious issues that they expect will be closely vetted by antitrust agencies.
Walgreens says the deal is necessary to help manage pressures from the nation’s increasingly challenging regulations on the health care sector. The company noted that increased bargaining power in its dealings with insurance and drug companies is not its primary motivation.
This year and last have both seen record-setting deals in the health care sector. Last year health care mergers and other deals totaled more than $390 billion, and this year consolidation in the industry has resulted in almost $450 billion in deal-making.