Drugstore stocks jumped on Monday as Rite Aid's merger with Walgreens appeared to be closer to gaining approval.
Shares of Rite Aid are up over 11 percent on Monday on high-volume trading. The Federal Trade Commission has to approve the merger, and doubts about that approval are easing, giving a boost to drug shares.
Fred's Pharmacy stock rose more than 13 percent on Monday. It is in a deal with Walgreens and Rite Aid to purchase 865 stores and certain assets related to store operations for $950 million in cash. That deal would make Fred's Pharmacy the third-largest drugstore in the U.S.
Rite Aid and Walgreens have pushed back the closing date on their combination a few times as they await the FTC's decision. The transaction with Fred's Pharmacy is expected to take place several months after the Rite Aid-Walgreens deal is completed, subject to approvals and closing conditions.
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