Albertsons Rite Aid merger : Albertsons to buy 2,500+ drug stores of Rite Aid

Albertsons Rite Aid merger : US grocery retailer Albertsons Companies has struck a deal to acquire over 2,500 drug stores that Rite Aid did not sell to Walgreens Boots Alliance.

According to the latest retail acquisition news, the merger of Albertsons Companies with the remaining Rite Aid drug stores is expected to create a food, health, and wellness leader with annual sales of $83bn.

As per the terms of the Albertsons Rite Aid merger, shareholders of Rite Aid will be entitled to either get a share of Albertsons Companies plus about $1.83 in cash or 1.079 shares of the grocery retail company.

After closing of the Albertsons Rite Aid merger, shareholders of Rite Aid will own between 28% and 29.6% stake in the enlarged company while Albertsons Companies shareholders will hold the remaining 70/4% or 72% stake.

John Standley, the incumbent chairman and CEO of Rite Aid will become the CEO of the enlarged company, which will have two headquarters in Boise, Idaho, and Camp Hill, Pennsylvania. It will take a new name which will be disclosed before the completion of the Albertsons Rite Aid merger.

A Rite Aid drug store. Photo courtesy of Youngamerican at English Wikipedia.

John Standley, commenting on the Albertsons Rite Aid merger, said: “This powerful combination enables us to become a truly differentiated leader in delivering value, choice, and flexibility to meet customers’ evolving food, health, and wellness needs.

“The combined platform positions Rite Aid to capitalize on our pharmacy expertise and expand and enhance our pharmacy footprint. We are confident that delivering improved customer experiences and value will drive growth and profitability while creating compelling long-term value for shareholders.”

In September 2017, Rite Aid completed sale of 1,932 drug stores to rival drug store chain Walgreens Boots Alliance for $4.375 billion. Originally, the two drug store chains had entered into a $5.175 billion deal in June 2017 in which Walgreens Boots Alliance was to acquire 2,186 drug stores and related assets of Rite Aid.

However, the original Walgreens Rite Aid transaction was forced to be trimmed owing to competition concerns. It left Rite Aid with over 2,500 drug stores, which it had been operating till date.

The just proposed Albertsons Rite Aid merger will create an enlarged company that will operate nearly 4,900 locations to go along with 4,350 pharmacy counters, and 320 clinics in 38 US states and Washington, D.C.

Following the completion of the Albertsons Rite Aid merger, a majority of Albertsons Companies pharmacies will be rebranded as Rite Aid, and the company will continue to operate Rite Aid’s independent pharmacies.

Commenting on the Albertsons Rite Aid merger, Bob Miller – Chairman and CEO of Albertsons Companies, said: “We have always put our customers first, and our combination with Rite Aid will enable us to even better serve the valuable pharmacy customer by providing a fully integrated one-stop-shop for our customers’ food, health, and wellness needs.

“I have long known the excellent management team at Rite Aid, and we share a singular focus on superior customer service and a clear vision and strategy to become the favorite local supermarket and pharmacy to shoppers in every neighborhood we serve.”

Unanimously approved by the boards of directors of the two companies, the Albertsons Rite Aid merger is likely to be wrapped up early in the second half of this year, subject to approval of the shareholders of Rite Aid, receipt of regulatory approvals and meeting of other customary closing conditions.