Bringing a halt to Wednesday's recovery, the Dow fell 167 points or -0.78%. The S&P 500 dropped 20 points or -0.86% and Nasdaq rolled back 90 points or -1.44%.
The $9.4 billion merger between Walgreen Boots Alliance and Rite Aid is terminated and a new offer to purchase half of Rite Aid's stores is tabled. Walgreen closed at 1.66% while Rite Aid tumbled precipitously -26% on news of the failed merger.
- Dow 21,287 -0.78%
- S&P 500 2,419 -0.86%
- Nasdaq 6,144 -1.44%
- Russell 2000 1,416 -0.60%
- NYSE Composite 11,739 -0.62%
- Gold 1,245.60 -0.02%
- Oil WTI $44.87 -0.13%
- 10-Year Treasury Yield 2.27% +0.05
Oil climbs as the rally holds steady for the sixth session straight although it remains in bearish territory. Gold prices dip 0.02% as investors absorb economic news and as central bank heads offer tentative signs of easing off monetary stimulus programmes.
Gainers and losers
Acuity Brands, lighting and buildings management solution provider, vaulted close to +11% after beating earnings expectations.
Also beating expectations was alcohol beverage producers, Constellation Brands which jumped +5.6% on rising beer sales. Devon Energy meanwhile saw a surge at 4.12%.
Another big loser was biopharmaceutical, Incyte, down -4.13%.
Too big, too bold?
Walgreen Boots Alliance slims down from a $9.4 bn merger deal with Rite Aid Corp. Walgreens proposed instead to buy half of Rite Aid's stores hoping to soothe Federal Trade Commission anti-trust concerns.
Walgreen discussed the decision to end the merger deal on Thursday in its third quarter earnings call. The turnaround according to Walgreen was due to 'changes in the market during the longer-than-expected Federal Trade Commission review process' as well as ongoing uncertainty about the potential outcome.
Walgreen will purchase 2,186 stores from Rite Aid, together with their warehouses and inventory but does not expect to take on debt.
Walgreen's chief executive, Stefano Pessina said,"Overall, I view this deal as being more attractive than the transaction it replaces, recognizing that the adjustment and compromises that we have had to make since the original deal was announced in what continues to be a challenging market for pharmacy.
"We expect that this new smaller deal will deliver synergies in excess of $410 million per annum within 3 to 4 years of the initial closing."