The daily business briefing: June 29, 2017

Homeland Security tightens security for U.S.-bound flights, Walgreens nixes Rite Aid merger plan, and more

A Walgreens in Washington, D.C.
(Image credit: KAREN BLEIER/AFP/Getty Images)

1. Homeland Security announces new security measures for U.S.-bound flights

The Department of Homeland Security on Wednesday announced new security measures for U.S.-bound flights from overseas. Homeland Security Secretary John Kelly said the measures "will be both seen and unseen, and they will be phased in over time." The airlines will have to comply with tighter screening of electronic devices and more effective use of bomb sniffing dogs, but laptops and tablets will be allowed in carry-on bags. Kelly said that any carrier that does not comply could be included in a ban on laptops in carry-on luggage. Since March, passengers on flights arriving in the U.S. from certain Muslim-majority countries have been barred from carrying devices larger than a cellphone on board, although those restrictions could be lifted on airlines and airports that adopt new security policies. "The threat has not diminished," Kelly said. "In fact, I am concerned that we are seeing renewed interest on the part of terrorist groups to go after the aviation sector."

CNN The Washington Post

2. Walgreens and Rite Aid replace merger plan with smaller deal

Walgreens Boots Alliance said Thursday that it had ended its $9.4 billion merger deal with Rite Aid Corp., and would instead buy 2,186 Rite Aid stores for $5.2 billion in cash. The new deal, which would cover half of Rite Aid's stores, also would give Rite Aid the option of joining Walgreens' group purchasing organization. This now-scrapped merger deal was announced in October 2015 and revised in January of this year, but it faced intense scrutiny by antitrust regulators. Once the new deal secures approval, Walgreens will take over the Rite Aid stores and other assets over six months, and convert them to the Walgreens brand. Walgreens shares rose by 1.7 percent in premarket trading, while Rite Aid shares fell by 6.1 percent.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

MarketWatch The Wall Street Journal

3. Blue Apron lowers IPO price

Blue Apron on Wednesday priced its looming IPO at $10 per share, after saying in an updated filing with the Securities and Exchange Commission that it was lowering its range to $10 to $11 per share, down from an initial range of $15 to $17 per share. Although initial stock offering pricing often fluctuates as companies gauge interest, Blue Apron's drop marks a significant change for what is viewed as the year's next big IPO. At $10 a share, Blue Apron, which delivers fresh ingredients for curated recipes to subscribers, would be valued at just below $2 billion. Some analysts suspect Amazon's massive $13.7 billion bid for Whole Foods two weeks ago raised a cloud over Blue Apron, potentially dampening investor enthusiasm for the IPO.

TechCrunch The New York Times

4. Fed clears big banks to buy back stock

The Federal Reserve on Wednesday gave the nation's 34 biggest banks approval to return extra capital to shareholders through stock buybacks and dividends. The banks, such as JPMorgan Chase and Bank of America, passed the second part of the Fed's annual stress test to assess the banks' ability to weather a financial crisis. Just one bank, Capital One, will have to resubmit its plan by the end of the year, although the Fed will let it proceed with its capital plan for now. Together, the banks have a capital cushion of $1.2 trillion, an increase of $750 billion since 2009. Fed Governor Jerome Powell said the stress test process "has motivated all of the largest banks to achieve healthy capital levels and most to substantially improve their capital planning processes."

Reuters The New York Times

5. Sycamore Partners to buy Staples for $6.9 billion

Private equity firm Sycamore Partners said Wednesday that it would buy office supply retailer Staples for $6.9 billion. Sycamore Partners already owns several big retailers, including Talbots, the Limited, and Hot Topic, and it said Staples was an attractive acquisition because it is an "iconic brand." Still, the deal comes after Staples has seen sales and gross profits fall for each of the last four full years. The company has been shedding stores as it struggles to compete with Office Depot, online rivals such as Amazon, big-box chains such as Walmart and Target, and warehouse clubs such as Costco.

The New York Times

To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us
Harold Maass, The Week US

Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.