retail news in context, analysis with attitude

Bloomberg reports that Walgreens Boots Alliance, still struggling to do anything it can in order to get the regulatory approvals necessary to complete its acquisition of Rite Aid, " is nearing an agreement to sell more assets to Tennessee-based discount chain Fred’s Inc. -- boosting the number of stores and adding distribution centers, software and personnel, according to one of the people."

The story says that "the new package for Fred’s will likely include more stores than the 865 that Walgreens initially agreed to sell, according to one of the people, who declined to specify the exact number of outlets or the revised purchase price. Fred’s would also get the rights to the Rite Aid brand name for an extended period beyond the 24-month period outlined in the original deal, the person added. Senior Rite Aid executives could also move over to Fred’s, although exactly who and how many is still under discussion..."

Bloomberg writes that "Walgreens could present the beefed-up package to the U.S. Federal Trade Commission within weeks, the person said, in hopes of satisfying the agency’s concerns after an initial proposal fell short. The merger, which would combine the No. 2 and No. 3 in the industry, has also raised concerns among state attorneys general, at least a dozen of whom are scrutinizing the deal, another person familiar with the matter said."
KC's View:
When this story broke yesterday, I got the following email from MNB reader Tom Murphy, who IMHO gets it right:

Is it just me or does this deal smell a little like the Haggen debacle in the PNW?  Fred’s currently has 650 stores (mostly in the southeast)…and is going to pick up 865 stores (scattered across the US)?  If the FTC requires a quick turn on the assets, like it did with Haggen…this will be another mess.  Wonder where Fred’s is getting the capital…could it be another helpful private equity partner?

I'm not sure I trust the FTC's instincts when it comes to 21st century competition.