ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, April 18, 1996 TAG: 9604180055
SECTION: BUSINESS PAGE: B7 EDITION: METRO
DATELINE: CLEVELAND
SOURCE: ASSOCIATED PRESS
FTC to sue, saying deal will drive up drug prices
Claiming the deal will drive up the price of prescriptions in nine states, federal antitrust regulators said Wednesday they'll sue to block drug store chain Rite Aid Corp. from buying competitor Revco D.S. Inc.
The Federal Trade Commission voted 5-0 Wednesday to ask a federal court in Cleveland for an injunction against the $1.8 billion purchase, which would link the country's top two pharmacy chains.
The vote follows months of unsuccessful negotiations between FTC staff and Rite Aid on how to ensure that the combined company doesn't overwhelm its competitors in the East and Midwest.
Attorneys general from New York and Ohio quickly announced they will join the FTC's case and others were expected to do likewise.
Despite those announcements, however, Rite Aid said it still hopes to reach a settlement with the FTC that will allow the deal. The company extended the expiration date of its offer for Revco shares from Friday to Wednesday.
``We're continuing negotiations and hope for a successful conclusion,'' said spokeswoman Suzanne Mead.
Revco spokesman Tom Dingledy declined to comment.
``It's quite common in cases involving mergers of national chains for there to be settlement discussions involving the possible divestiture of certain stores in markets where the government believes the merger would result in competitive problems,'' said Mark Horoschak, an antitrust lawyer in Charlotte, N.C., and a former FTC regulator.
The FTC said states particularly affected are Virginia, West Virginia, Ohio, Indiana, Pennsylvania, Maryland, North Carolina, South Carolina and New York.
LENGTH: Short : 42 linesby CNB