Walgreens (WBA) - Get Report and Rite Aid (RAD) - Get Report execs appear to be acknowledging the long odds their $15 billion merger is facing.

Both sides maintain they are fighting hard to win approval from skeptical antitrust enforcers at the Federal Trade Commission. But Wall St. has already grown accustomed to the notion that the FTC won't clear the transaction and the companies will need to either give up or fight the commission in court.

And in an update on the merger to employees Monday, John Standley and Ken Martindale, respectively Rite Aid's chairman and CEO and the CEO Rite Aid Stores, the pair wrote in a downcast tone on the deal's prospects. Also Monday, Walgreens declined to issue additional debt securities to replace notes that had to be redeemed if the Rite Aid transaction did not close by the beginning of this month.

Monday's update from Rite Aid did not include the usual optimistic prediction that approval from the government is likely. The pair said only: "We expect a decision sometime soon."

A Rite Aid press officer declined to elaborate on the letter, which was disclosed in a filing with the Securities and Exchange Commission. "We have no further comment to provide," the media rep said in an email.

In their letter to employees, Standley and Martindale said, while "we remain actively engaged in discussions with the FTC . . . there can be no guarantee that the merger will be approved."

Although they said nothing about the direction the talks with the FTC are going, they made it clear they are preparing the company to go it alone if the federal government blocks the deal. "We also continue to work diligently in reviewing our strategy and making necessary changes to improve our performance," they wrote. "Our Rite Aid team has worked hard over the past few years to develop a robust health and wellness platform that is both strong and unique in the retail drugstore space. We will continue to build from this strong foundation as we also focus on operational efficiency, investing in growth opportunities and delivering a consistently outstanding experience to our customers and patients."

They also lamented that the FTC's review has taken longer than expected and the resulting negative impact on Rite Aid's financial performance. "As a management team, we regret that this has created uncertainty and a challenging work environment for all of us at Rite Aid."

Walgreens too put out a sign that it is growing pessimistic about prospects before the FTC. On Monday the company redeemed $3.5 billion in notes issued a year ago to help pay for the merger.

In a June 2 filing with the Securities and Exchange Commission Walgreen said that pursuant to the terms of a December 17, 2015 indenture between Walgreens and trustee Wells Fargo Bank, N.A. for the notes, which were issued on June 1, 2016, Walgreens was required to redeem them if the Rite Aid acquisition was not consummated by June 1, 2017.

Replacement notes are not being issued but Walgreens did say it has sufficient resources available from its cash, investment balances and existing credit facilities to carry out the transaction if it is allowed to.

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