For almost a year it seemed like the merger between Rite Aid (RAD) and Walgreens Boots Alliance (WBA) would not receive approval by the Federal Trade Commission. The FTC is examining whether a newly combined entity would be too large.
But now the deal seems more likely to occur, largely because Walgreens has said it is willing to divest itself of a larger number of Rite Aid's stores than it had previously said it would -- more than a quarter of Rite Aid's current locations. A combined Walgreens-Rite Aid would also not be much larger than its next biggest competitor. All this could bode well for investors.
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If the merger goes through at the minimum price of $6.50 per share, Rite Aid investors could earn an 18% profit. This could also be an excellent opportunity for investors with limited capital to deploy stock options and profit from Rite Aid's upside at a reduced risk.