Rite Aid Corp. To Divest Four Vermont Stores

June 4, 2007 - Vermont Attorney General William H. Sorrell today announced that Rite Aid Corporation will sell four retail drug stores in Vermont to resolve concerns about its acquisition of the U.S. assets of Jean Coutu Group (PJC) Inc. The stores to be divested are in Bellows Falls/Walpole, Lyndonville, Newport/Derby, and St. Johnsbury. Divestiture, or the forced sale of some stores in certain geographic areas to a competitor, is a remedy used in antitrust cases to ensure the competition continues to be strong in those areas after a merger.

Rite Aid, the nation’s third largest retail drug store chain, announced its agreement to purchase the drug store assets of Jean Coutu in August 2006. Jean Coutu operates the fourth largest U.S. drug store chain, which includes Brooks and Eckerd drug stores. After the merger, the combined Rite Aid / Brooks-Eckerd will be the third largest retail drug store chain with over 5,000 stores nationwide.

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Attorney General Sorrell’s antitrust investigation of the proposed merger was coordinated with the state Attorneys General of Maine, Maryland, New Jersey, New York, Pennsylvania, and Virginia, as well as with investigation by the Federal Trade Commission. The FTC has reached an agreement with Rite Aid that requires Rite Aid to sell 23 stores to competing drug store operators, including three stores in Vermont. Vermont’s settlement with Rite Aid also requires those three divestitures, along with the divestiture of an additional store in Newport/Derby. The states required a total of 26 divestitures.

“This settlement will preserve competition among retail drug stores in Vermont by requiring Rite Aid to sell drug stores in Vermont where the transaction might have substantially lessened competition,” Attorney General Sorrell said. “Consumers, particularly the uninsured, benefit from the better prices, wider choices, and increased customer service that results from vigorous competition among chain drug stores.”

Attorney General Sorrell noted that the settlement with Vermont and the other states preserves competition in more areas of Vermont than the FTC settlement. “While we are pleased to work with the FTC in ensuring Vermonters continue to enjoy the benefits of competition, we will continue to take an independent view of markets and competition in Vermont,” said Attorney General Sorrell.

Source: Vermont Attorney General