Albertsons Merges with Rite Aid, Combining Groceries and Convenience
- Author: David Armstrong Feb 23, 2018,
Feb 23, 2018, 2:02
According to Rite Aid spokesperson Ashley Flower, two Genesee Street locations - 47 E. Genesee St. and 314 Genesee St. - have been purchased by Walgreens Boots Alliance, which reached a deal to buy almost 2,000 Rite Aid locations last September.
The integrated company will operate approximately 4,900 locations, 4,350 pharmacy counters and 320 clinics across 38 states and Washington, D.C., serving more than 40 million customers per week.
Walgreens plans to buy about 2,000 of Rite Aid's locations, a little less than half, for about $4.4 billion after the Federal Trade Commission blocked the pharmacy chain's outright sale to Walgreens a year ago. Under the terms of the agreement, in exchange for every 10 shares of Rite Aid common stock, Rite Aid shareholders can receive either one share of Albertsons common stock plus about $1.83 in cash, or 1.079 shares of Albertsons stock.
Walgreens attempted to buy the chain previous year, but the full merger was blocked because of antitrust concerns. The companies settled on the smaller deal instead.
National grocery operator Albertsons Companies plans to buy Cumberland County-based Rite Aid.
Consumer stocks were broadly lower today, with shares of consumer staples companies in the S&P 500 sinking over 2.1% this afternoon while shares of consumer discretionary firms in the S&P 500 were falling almost 0.4%. Rite Aid shareholders will own a 28% to 29.6% stake in the company, depending on the results of cash elections, while Albertsons shareholders will own the rest.
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...
Standley will serve as CEO of the new company while current Albertson's CEO Bob Miller will serve as chairman. The number of meaningful takeover targets in the industry has narrowed for Albertsons, but in Rite Aid the grocer gains a strong brand in a sector that's becoming increasingly important for supermarkets. The Company's Retail Pharmacy segment consists of Rite Aid stores, RediClinic and Health Dialog.
Publicly traded Rite Aid stock (NYSE:RAD) was valued at $2.18 a share following Tuesday morning's merger announcement.
The deal addresses the remaining portion of Rite Aid left over from its takeover by Walgreens past year. Eventually, customers can pick up prescriptions at any Walgreens store nationwide.
Albertsons said it has $59.7 billion in annual sales.
More notable recent Rite Aid Corporation (NYSE:RAD) news were published by: Seekingalpha.com which released: "Rite Aid's Turnaround Is Inevitable" on January 30, 2018, also Benzinga.com with their article: "Vetr Community Upgrades Rite Aid To Strong Buy" published on January 25, 2018, Seekingalpha.com published: "Rite Aid: Destination Insignificance" on February 12, 2018.
Chad Bray is a New York Times writer.