Albertsons and Rite Aid combine to create food, health and wellness giant
Albertsons and Rite Aid have announced a definitive merger agreement, thereby combining one of the largest supermarket chain store operators in the U.S. with the drugstore chain.
Albertsons, which is privately owned by a group led by Cerberus Capital Management, will exchange shares and/or cash for Rite Aid’s common stock in the deal. The combined companies are expected to be valued at roughly $24 billion.
John Standley, the current chairman and chief executive of Rite Aid, will become CEO of the merged companies. Bob Miller, the current CEO and chairman of Albertsons Cos., will become chairman.
All told, Albertsons and Rite Aid will operate around 4,900 locations with 4,350 pharmacies and 320 in-store clinics across 38 states.
Management at Albertsons and Rite Aid believe the new company will be a force to be reckoned with. In terms of footprint, the new company will be ranked first or second in two-thirds of metro areas within the U.S. It will be ranked first or second in 70 percent of pharmacy locations. The company sees particular opportunities for growth on the West Coast and Northeast where its respective brands are well established.
“We have always put our customers first and our combination with Rite Aid will enable us to even better serve the pharmacy customer by providing fully integrated one-stop-shop for our customers’ food, health and wellness needs,” said Mr. Miller. “I have long known the excellent management team at Rite Aid and we share a singular focus on superior customer service and a clear vision and strategy to become the favorite local supermarket and pharmacy to shoppers in every neighborhood we serve.”
“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 Mr. Standley. “The combined platform positions Rite Aid to capitalize on our pharmacy expertise and expand and enhance our pharmacy footprint.”
The new company sees opportunities to leverage synergies across loyalty programs at its respective chains. Combined Albertsons and Rite Aid have a base of 25 million active participants in rewards programs.
- Albertsons Companies and Rite Aid to Create Food, Health, and Wellness Leader – Albertsons Companies
DISCUSSION QUESTIONS: What do you see as the positives and negatives of combining Albertsons Companies and Rite Aid? What will this combination mean for competitors, vendors and consumers?