Albertsons merges with Rite Aid in a competitive retail chain

USA – Albertson Cos., an American grocery company and Rite Aid, a US drugstore chain, have announced an agreement to form a merger that will institute an integrated food and drug business on the West Coast, mid-Atlantic and Northeast with US$83 billion in annual sales.

Rite aid stores will supply Albertsons’ private label food products such as ‘O’ Organics and Lucerne while most Albertsons in-store and stand-alone pharmacies will be rebranded as Rite Aid except Osco stores in Chicago because there was no overlap there-according to Federal Trade Commission review.

The partnership targets to expand market cover and locations for both food products and pharmaceuticals gaining top ranking recognition in most of US locations.

Following the merger, the new company intend to attract more than 40 million customers per week, operating in 4900 locations with 4350 pharmacy counters and 320 clinics in 38 states and Washington DC- according to Supermarket News.

Meant to be headquartered in Boise, Idaho, the combined business will be run with combined leadership from the two companies, John Standley as CEO while Bob Miller, chairman and CEO of Albertsons Cos., serving as chairman.

According to Standley, the powerful combination will enable them be a truly differentiated leader in delivering value, choice, and flexibility to meet customers’ evolving food, health and wellness needs.

“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 our shareholders,” said Standley.

The merger combines Rite Aid’s expertise in pharmacy and excellent management with Albertsons’ strength in the local supermarket chain to form a fully integrated one-stop-shop for customers’ food, health and wellness needs.

Bob Miller noted that the two shared a singular focus on customer needs and a dire need to become the most favorite retailer and pharmacy.

Under the terms of the agreement, Rite Aid shareholders will own a 28% to 29.6% stake while Albertsons will own the rest in the combined company.

According to the two companies, the realization of the merger depended on the Federal Trade Commission’s (FTC) review, which influenced a decision to rebrand most of Albertsons’ in-store pharmacies due to overlap concerns.

Under the terms of the agreement, Rite Aid shareholders will own a 28% to 29.6% stake while Albertsons will own the rest in the combined company.

Early last year, Walgreens had approached Rite Aid for a possible merger but the transaction was refuted by FTC.

However, Walgreens received regulatory approval to purchase over 1,900 Rite Aid pharmacies across the country.

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