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The Independent UK
The Independent UK
Business
Chiradeep BasuMallick

Buy Shares of Drugstore Chain Rite Aid; Walgreens Merger Seems More Likely

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. 

Walgreens Boots Alliance is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. See how Cramer rates the stock here. Want to be alerted before Cramer buys or sells WBA? Learn more now.

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.

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