The Rite Aid Corporation (NYSE:RAD) is in the process of being acquired by Walgreens Boots Alliance (WBA) for $17.2 billion.
With this acquisition, it is likely that Rite Aid will become Walgreens.
The rationale for this acquisition is twofold. First, Walgreens is looking to gain market share in the pharmacy space. Rite Aid is the No.
2 pharmacy chain in the United States, with about 1,200 stores. However, Walgreens has about 4,500 stores, so this acquisition would give it a larger presence.
Second, the merged company would have a larger pool of resources. Walgreens is the largest pharmacy chain in the world, with about $69 billion in annual revenue.
This would give the newly merged company a larger pool of resources to invest in its stores, online presence, and other businesses.
The combined company would also have a larger pool of prescription drug customers. Walgreens purchases medications in bulk, which gives it a significant advantage over other pharmacy chains.
There are some potential negative consequences of this merger. First, the combined company would have a larger debt load. The acquisition price is approximately $17.
2 billion, and Walgreens is carrying about $24 billion in debt. This would increase the company’s debt-to-GDP ratio.
Second, the number of jobs would be reduced as a result of the merger. The combined company would have about 120,000 workers, compared to about 170,000 workers for Rite Aid.
Finally, the merged company’s customer base would be more concentrated. 3 pharmacy chain in the United States, with about 24,000 stores. Walgreens is the No.
1 pharmacy chain, with about 4,500 stores. The newly merged company’s customer base would be more concentrated, which could lead to higher prices and reduced competition.
In conclusion, the acquisition of Rite Aid by Walgreens is likely to result in the company becoming Walgreens. The rationale for the merger is twofold: first, Walgreens is looking to gain market share in the pharmacy space and second, the merged company would have a larger pool of resources.
The combined company’s debt-to-GDP ratio would increase, and the number of jobs would be reduced. The merged company’s customer base would be more concentrated, which could lead to higher prices and reduced competition.
