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    Home > Active Ingredient News > Drugs Articles > The anti-monopoly organization is going to die. Walgreens, the second-largest drug retailer in the United States, has taken the third place

    The anti-monopoly organization is going to die. Walgreens, the second-largest drug retailer in the United States, has taken the third place

    • Last Update: 2015-10-29
    • Source: Internet
    • Author: User
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    Source: October 29, 2015 according to media reports, Walgreens boots alliance, the second largest national chain drugstore in the United States, announced on Tuesday that it would acquire Rite Aid, the third largest drugstore group, in cash

    The acquisition, together with liabilities, involved $17.2 billion

    Walgreens said the price of Rite Aid per share was set at $9, a 48% premium to Monday's closing price

    The company estimates that the deal is likely to be completed in the second quarter of next year, benefiting from the first year's earnings, with synergies expected to exceed $1 billion

    Once the news came out, it directly triggered a burst of excitement in the two stocks - Walgreens rose 6%, Rite Aid shares rose 40% on the same day

    Considering the scale of the two sides, the anti-monopoly regulatory authorities must be busy again

    As mentioned above, before the deal was concluded, the U.S

    drug retail market ranked second in the Jianghu: Walgreens received more than 148 million prescriptions every year, and Rite Aid ranked third, but the scale was much smaller than the previous one

    CVS ranked first

    According to IBISWorld, a market research organization, the second largest retailer now has 58% of the market share in the drug administration and cosmetics business, while Walgreens and rite have 31% and 10% respectively

    In addition, Rite Aid, based in Pennsylvania, has about 4600 stores in 31 states and 8200 stores in Walgreens, according to the Wall Street Journal

    CVS has 7800

    If the deal is concluded, the operators of the second and third largest drug administrations in the United States will gather together, and the competition with CVs will undoubtedly be further upgraded

    According to Wall Street reports, with the introduction of Affordable Care Act, there has been a wave of M & A in the field of health care in the United States, involving drug manufacturers, chain hospitals, insurance companies, etc

    The purpose of M & A is to reduce costs and enhance competitiveness

    At present, American chain drugstores are facing the pressure of rising drug cost

    Walgreens' acquisition of Rite Aid will effectively reduce costs

    In addition, Walgreens's wholesale business will benefit Rite Aid

    Earlier, Walgreens CEO pessina said the U.S

    market was ready for the next round of M & A because profits in all sectors were hit

    The government plays a more and more important role in controlling the expenditure of health care business, so they will definitely try their best to use their administrative power to reduce the expenditure of health care

    Last year, Walgreens acquired a stake in alliance boots, a European drugstore chain it has not yet owned

    CVs, on the other hand, is not idle

    Earlier this year, it bought target's drug agency business for $1.9 billion and plans to turn more than 1660 of its drug agencies into CVS brands

    Some people make a lot of money

    There must be more than two "newcomers" to be congratulated

    As the exclusive consultant of Walgreens, UBS, the sole agent of the transaction, has made a lot of money

    According to Jeffery nassof of Freeman & Co., a merger and acquisition consulting firm, the consulting fee for the deal should be $25 million, and the deal should yield another $25 million to $40 million

    It's not too cool to get $65 million in minutes

    Prior to the announcement of the deal, the bank ranked no more than 11% in the U.S

    M & a market share

    On the other hand, Citibank, the exclusive consultant of Rite Aid, has also reaped a lot

    However, this kind of large-scale transaction, both sides choose their own exclusive consultants, which is still quite rare nowadays.
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