Mergers & Acquisitions

Albertsons, Rite Aid Merge

Grocer picks up remaining stores not acquired by Walgreens

BOISE, Idaho, and CAMP HILL, Pa. -- Grocery retailer Albertsons Cos. and drugstore chain Rite Aid Corp. have entered into an agreement to merge.

Boise, Idaho-based Albertsons will buy the approximately 2,500 Rite Aid stores that rival drugstore chain Walgreens Boots Alliance Inc. is not buying from Camp Hill, Pa.-based Rite Aid. Deerfield, Ill.-based Walgreens received regulatory approval in September 2017 to purchase 1,932 stores from publically traded Rite Aid for $4.375 billion.

Current Rite Aid Chairman and CEO John Standley will become CEO of the combined, yet-to-be-named company, with current Albertsons Chairman and CEO Bob Miller serving as chairman. The new company will include leadership from both chains and will maintain both headquarters.

The integrated company will operate about 4,900 locations, 4,350 pharmacy counters and 320 clinics in 38 states and Washington, D.C. Most Albertsons’ pharmacies will be rebranded as Rite Aid, and the company will continue to operate Rite Aid stand-alone pharmacies.

The new company will have an expanded footprint and rank first or second in 66% of the top metropolitan areas in the United States and rank first or second in 70% of pharmacy markets. It will establish Rite Aid on the West Coast and have a strong brand position in the Northeast.

The combined company plans to drive growth by deepening relationships and expanding reach across higher-value pharmacy customers. It will also create cross-branded opportunities for its loyalty programs, with a combined base of 25 million active participants. And executives say the combined company’s expanding omnichannel platform will provide customers with convenience, choice and flexibility through multiple in-store formats, digital channels and same-day food and prescription delivery options from stores and via Drive Up & Go.

“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,” said Miller.

“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,” said Standley. “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.”

Privately held Albertsons operates stores in 35 states and the District of Columbia under 20 banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen and Carrs, as well as meal-kit company Plated. It also operates one Albertsons Express convenience store in Boise.

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