Grocery store chain Albertsons reached an agreement to fully acquire Rite Aid Corporation RAD.
What You Need To Know
Rite Aid and Walgreens Boots Alliance Inc WBA attempted to merge their pharmacy businesses together in 2015, but the merger failed. Rite Aid ended up selling 1,932 of its stores, multiple distribution centers and associated inventories to Walgreens for $4.4 billion.
Albertsons said Tuesday it will acquire the remaining Rite Aid business. Rite Aid shareholders could receive one share of Albertsons common stock plus $1.83 in cash for every 10 shares of Rite Aid they own; shareholders could also opt to receive 1.079 shares of Albertsons stock for every 10 shares of Rite Aid. Once the transaction closes, Albertsons shares are expected to trade on the New York Stock Exchange.
Rite Aid investors will own 29 percent of the combined entity.
Rite Aid's CEO and Chairman John Standley would serve as CEO of the combined entity which would have revenues of $83 billion. Albertsons' CEO and Chairman Bob Miller will serve as chairman of the new company.
Why It's Important
The combined business would operate around 4,900 total stores, 4,350 pharmacy counters and 320 clinics across 38 states and the District of Columbia. Most of the already existing Albertsons pharmacies will be re branded under the Rite Aid name.
"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 said in the press release. "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."
Rite Aid was trading up about 18 percent at $253 in the pre-market session.
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