What’s Your Deal?
Well actually they are merging into one!!
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.
A combined Albertsons and Rite Aid would have a value of roughly $24 billion, including debt. When the deal closes, Albertsons shares will trade on the New York Stock Exchange. Albertsons in 2015 filed an IPO it had hoped would value it at as much as $24 billion, including debt, but it canceled that plan.
This deal follows Rite Aid’s failed attempt in 2015 to sell to its 4,600 stores to Walgreens. That deal was whittled down by regulators to a purchase of 1,932 stores for $4.37 billion.
Current Rite Aid Chairman and Chief Executive Officer John Standley will become Chief Executive Officer of the combined company, with current Albertsons Companies Chairman and Chief Executive Officer Bob Miller serving as Chairman. The combined company is expected to be comprised of leadership from both companies and will be dual headquartered in Boise, Idaho, and Camp Hill, Pennsylvania. The name of the combined company will be determined by transaction close.
Since pharmacy shoppers tend to buy groceries while they’re waiting for prescriptions to be filled, Albertsons is hoping to see a boost in grocery sales overall due to higher foot traffic. Conversely, they’re hoping shoppers will buy more groceries when they hit up their local Rite Aid.
There’s no word on whether Albertsons will expand and continue Rite Aid’s loyalty program, wellness+, or if they’ll replace it with a new loyalty program. The main goal of the merger appears to be staying competitive with Amazon and giving Albertsons the opportunity to be publicly traded.
We Will Keep You Updated as we hear more!!
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