Walgreens said they are currently co-operating with regulators from the Federeal Trade Commission and the demands were a part of the regulatory process and already planned for.
The Commission is taking a closer look at the deal to determine whether the merger may reduce competition in the US retail landscape for the drugstore category, which is dominated by a handful of large players.
Walgreens prepared to shed stores
Walgreens has already said that it is will to divest up to 1,000 physical stores if that is necessary to fulfil regulatory requirements for the deal to go ahead.
This would represent approximately 8 percent of a store count that currently totals around 12,700 in the United States and also accounts for a considerable proportion of spend on beauty and personal in the country.
However, despite Walgreens’ executive already tabling concessions in an effort to seal the deal, some analysts believe the request for additional information could mean that the regulatory go ahead is already being questioned by the authorities.
On the back of the announcement, an analyst at Wolfe Research, which specializes in M&A activity, published a note warning that the question of how much the deal might affect retail competition could still put the deal in jeopardy.
Final step of regulatory process
Back in January of this year Walgreens and Alliance Boots confirmed that they had moved to the second and final step in the process to form a global strategic partnership that would rename the business Walgreens Boots Alliance.
US-based Walgreens and UK-based Alliance Boots are both leading players in the pharmacy retail business, and are also manufacturers of own-brand personal care and cosmetic products.
A recognition merger agreement was sealed at the beginning of the year by Walgreens shareholder, confirming that the Walgreens business is a wholly owned subsidiary of Walgreens Boots Alliance.
Big global beauty brands
The business comprises three divisions – Retail Pharmacy USA, Retail Pharmacy International and Pharmaceutical wholesales – in addition to a number of global cross divisional functions that includes Global Brands.
Big global beauty brands including own-name products and the globally recognised No. 7 name from the Boots Alliance portfolio.
Walgreens announced its merger with Boots back in 2012, after it bought a 45% share in the business at a cost of $6bn.
The companies state that with the completion of Step 2, Walgreens has acquired the remaining 55 percent of Alliance Boots in exchange for approximately $5.3bn in cash and 144.3 million shares of stock.