Associated Press
February 20, 2018
The privately held owner of Safeway, Vons and other
grocery brands is plunging deeper into the pharmacy business with a deal to buy
Rite Aid, the nation's third-largest drugstore chain.
Albertsons Companies is offering either a share of its
stock and $1.83 in cash or slightly more than a share for every 10 shares of
Rite Aid. A deal value was not disclosed in a statement released Tuesday by the
companies.
Shares of Rite Aid, which have shed more than half their
value over the past year, jumped 40 cents, or 18.8 percent, in premarket
trading after the deal was announced.
Shareholders of Boise, Idaho-based Albertsons will own
more than 70 percent of the combined company, which is expected to trade on the
New York Stock Exchange. 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.
Rite Aid Chairman and CEO John Standley will lead the
combined company as CEO, while Albertsons leader Bob Miller will serve as
chairman. The companies say they will keep headquarters in both Boise and Camp
Hill, Pennsylvania, which is where Rite Aid is based.
Albertsons said it will continue to run Rite Aid
stand-alone stores, and most of the grocery operator's pharmacies will be
rebranded as Rite Aid. Albertsons also runs Jewel-Osco, Shaw's and Acme stores.
Rite Aid Corp. said earlier this year that it runs around
4,400 stores. Larger rival Walgreens had tried unsuccessfully to buy the chain,
but the company scuttled that push last year after encountering regulatory
resistance. Last September, Walgreens agreed to buy nearly 2,000 Rite Aid
locations and some distribution centers for about $4.38 billion. Rite Aid said
late last month that it had transferred about 625 stores to Walgreens.
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