Rite Aid Corporation has abandoned its proposed acquisition of Revco D.S., Inc. after the Federal Trade Commission voted April 17 to authorize its staff to seek a preliminary injunction in federal court blocking the transaction. The FTC had said the deal would have allowed the combined firm, which would have had nearly 5,000 stores, to control prices for prescription drugs, resulting in higher costs for consumers.
The FTC was set to argue in court for a preliminary injunction on the grounds that the Rite Aid-Revco merger would violate federal antitrust laws by substantially reducing competition for prescription drugs sold in retail pharmacy outlets in numerous geographic areas.
Attorneys General from the states of Ohio, West Virginia, New York and Indiana had also planned to file suits to stop the merger. These four states are among those which would have been the most adversely affected by the proposed transaction.
Rite Aid notified the FTC today that it had abandoned the transaction. Rite Aid is based in Camp Hill, Pennsylvania, and Revco is based in Twinsburg, Ohio. They are the two largest retail drug store chains in the United States.
(FTC File No. 961 0020)