Merger-stingy FTC claims drug chain tie-up

Trustbusters are thriving under President Trump.

Walgreens and Rite Aid nixed their $9.4 billion mega-merger on Thursday, becoming the latest casualties of Washington regulators who have policed tie-ups aggressively this year despite the Trump administration’s pro-business agenda.

The drugstore deal fell victim to the Federal Trade Commission, which had raised concerns the merger would have created a giant capable of bullying pharmacy-benefit managers and stifling price competition in key retail markets across the country.

Elsewhere this month, the FTC sued to block a merger between Fanduel and DraftKings, arguing the fantasy-sports sites would control 90 percent of daily market despite the companies’ protests they were niche players in a much-larger seasonal industry.

The FTC’s big cudgel has surprised some insiders, who note it’s getting wielded on the watch of interim Chair Maureen Ohlhausen, a Republican who took the helm after Trump sacked President Obama’s appointee, Edith Ramirez.

“I would say she’s becoming center-right,” a source close to the agency said of Ohlhausen, adding that the FTC’s antitrust stance hasn’t shifted significantly from its “center-left” positioning under Ramirez.

“If we saw her approve DraftKings, that would have been a big sign” of a major shift to the right, the source said, adding that Ohlhausen sued to block the fantasy sports merger despite her staff not being adamant that she sue.

In the case of Walgreens and Rite Aid, FTC staff was more strident about suing to block the deal and Ohlhausen has followed their recommendations, sources said.

Although more reluctant to sue to force behavioral remedies, Ohlhausen holds similar views to Ramirez when policing market dominance, according to one source.

That’s despite previous noises from Ohlhausen that Obama-era antitrust regulation was heavy-handed.

“Although well intentioned, the majority Commission under President Obama at times pursued an antitrust agenda that disregarded sound economics,” Ohlhausen said in a January speech to the Heritage Foundation, a right-leaning think tank.

The FTC’s latest moves — which also include a suit this month to block Sanford Health’s acquisition of Mid Dakota Clinic, alleging it would stifle competition for primary care services in North Dakota — may also partly be a result of the agency being short-handed.

Like other regulatory bodies in Washington, the Trump administration has been slow to fill three empty seats at the five-member FTC, failing to act on his rumored appointment of Utah Republican Sean Reyes as the new chair.

That, in turn, has forced Ohlhausen and Democratic FTC Commissioner Terrell McSweeny to forge a consensus to move through their docket.

Meanwhile, Trump’s own views on mega-mergers still aren’t clear, insiders say. Despite business-friendly rhetoric, the president has cited antitrust concerns around Amazon, which just announced a $13.7 billion acquisition of Whole Foods.


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