Market Insider

Walgreens, Rite Aid shares end sharply lower as regulatory fears cast doubt on merger

A delivery to a Walgreens location in New York City.
Scott Mlyn | CNBC

Shares of Walgreen Boots Alliance and Rite Aid tumbled on Friday, after the merger of the two drugstore companies faced reported resistance from U.S. antitrust regulators.

Walgreens shares ended the session down by about 2 percent and Rite Aid shares plunged by more than 13 percent.

Walgreens said in September it would divest between 500 and 1,000 stores to help get cleared by the Federal Trade Commission for a $9.4 billion deal to acquire Rite Aid, according to Reuters. However, reports say the antitrust regulators will not accept this concession.

The merger agreement was previously scheduled to be completed on October 27, 2016 but was delayed until January 27.

Walgreens is the largest U.S. retail pharmacy chain by locations and is looking to buy Rite Aid to further expand its brand across the country and to have more leverage in drug price negotiations.

Rite Aid did not immediately respond to a request for comment by CNBC. Walgreen's representatives declined to comment.