Rite Aid Shares Given Boost as Albertsons Eyes Chain

Rite Aid

Grocer Albertsons Cos. will buy drugstore chain Rite Aid Corp.in a deal that would accelerate the remaking of the USA retail and health care industries.

Last year, Walgreens announced an agreement to buy almost 2,000 Rite Aid stores after an offer to buy the entire company fell apart. With 2,500 stores concentrated in the Northeast and the West Coast, Rite Aid it is hardly a national chain anymore, and tiny next to CVS and Walgreens, with roughly 10,000 locations apiece.

Upon the deal's closing, Albertsons-Rite Aid will have approximately 4,900 locations (with 4,300 of them including pharmacy counters).

Rite Aid, the nation's third-largest drugstore chain, has 270 stores in MI. The companies say the deal should close in the second half of this year, but regulators and Rite Aid shareholders still have to approve it. A new corporate name will be decided later.

The CEOs of the two companies said during an interview on Monday that the merger was the best way for the two to compete in businesses that are being threatened more by Amazon.com as well as Walmart.

View Rite Aid's stock price in real time here.

The move will allow Albertsons to become "a fully integrated one-stop-shop", Miller said in a statement.

Cerberus acquired Albertsons in a $3.3 billion deal with Supervalu in 2013.

The merger would bring privately-backed Albertsons onto the New York Stock Exchange, finally taking the company public after years of speculation.

Boise, Idaho-based Albertsons plans to acquire the parts of Rite Aid that are left over after a separate sale of almost 2,000 stores, the Wall Street Journal reported, citing the companies' chief executive officers.

Rite Aid CEO John Standley will become CEO of the new combined company.

Albertsons, whose parent is owned by a consortium of investors led by private-equity firm Cerberus Capital Management, now operates more than 1,700 in-store pharmacies. Now there is a new deal with grocery chain Albertsons.

In November, the company reached an agreement with Instacart to provide on-demand grocery-delivery services.

Standley added that the merger would also expand the e-commerce offering by Rite Aid given the progress made by Albertsons in that area. In 2015 alone, with the help of generous customers, Albertsons Companies and the Albertsons Companies Foundation gave more than $270 million in food and financial support to the more than 2,300 communities they serve.

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