Safeway chain buying Camp Hill-based Rite Aid, doubling down on pharmacy

Alberstons Cos. owners of Shaw’s and Star Markets in the Boston area says it will buy Rite Aid Corp

Grocery chain Albertsons announced plans Tuesday to acquire Rite Aid in a cash and stock deal, as the traditional grocery industry continues to look for growth by broadening offerings, not just store base.

Following the merger, which must first be approved by regulators, Albertsons and Rite Aid will have approximately 4,900 locations and 4,350 pharmacy counters, as well as 320 clinics across 38 states and Washington, D.C. They will also serve 40 million customers per week, Albertson's said in a press release.

Mr. Miller would serve as chairman of the combined company and John Standley, the Rite Aid chairman and chief executive, would be chief executive. The national pharmacy chain's stock price has spiked almost 8%, following the news that the company has entered into a definitive merger agreement under which privately held Albertsons Companies will merge with Rite Aid. The New York-based Mufg Americas Hldg Corporation has invested 0% in Rite Aid Corporation (NYSE:RAD).

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

"The hallmark of Albertsons Companies' business has been to become the favorite local supermarket of our customers", said Albertsons Companies Chairman and current Chief Executive Officer Bob Miller. In addition, customers can no longer use the Rite Aid online or mobile prescription refills, sot they must call or stop into the pharmacy to fill a prescription until the transition is complete.

The move comes after 7 months positive chart setup for the $2.25B company.

Last year, CVS Health Corp. agreed to pay about $68 billion for health insurer Aetna Inc., while The Wall Street Journal recently reported that Walgreens Boots Alliance Inc.is in early talks to buy drug distributor AmerisourceBergen Corp. Walgreens agreed to buy almost 2,000 Rite Aid locations and some distribution centers for about $4.38 billion.




Depending on whether Rite Aid shareholders choose to be paid in cash and Albertsons stock or only stock, the deal values Rite Aid at between $1.30 and $2.65 per share, Evercore ISI analyst Ross Muken said. The buyer had to be happy with 1,900 of Rite Aid's 4,600 stores. The prognosis is mixed, says Jay Jacobowitz, president and founder of Retail Insights.

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

Acme has suffered from a decline in market share from locally owned Shoprite stores as well as Walmart. "The company has struggled for better than a decade to consistently grow, and its far-flung and complex components I believe are the major reason for this lack of progress".

Rite Aid agreed previous year to sell 1,932 stores and three distribution centers to Walgreens for $4.38 billion after the companies failed to complete an even bigger deal.

Since October 3, 2017, it had 0 insider buys, and 1 insider sale for $58,915 activity. Albertsons' pharmacies will be rebranded under the Rite Aid name.

The new entity's board of directors will consist of four individuals to be named by Albertsons Cos., four named by Rite Aid and one jointly selected director. "It just won't be very pretty". The new company will have an expanded footprint and be ranked first or second in 66% of the top metropolitan areas in the US and will be ranked first or second in 70% of pharmacy locations.

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