Albertsons, the supermarket operator, plans to buy the remnants of the Rite Aid drug chain after more than 1,900 of its stores and three of its distribution centers are sold to Walgreens. A combined Albertsons and Rite Aid would have a value of roughly $24 billion, including debt. The two will together have about 4,900 locations, 4,350 pharmacy counters, and 320 clinics across 38 states and Washington, D.C.
Albertsons would acquire the rest of Rite Aid in a cash-and-stock deal, with Rite Aid shareholders owning between 28 percent and 29.6 percent of the combined company. Under the terms of the transaction, Rite Aid shareholders could choose to receive $1.83 in cash and one share of Albertsons stock for every 10 shares of Rite Aid they own or 1.079 shares of Albertsons stock for every 10 shares of Rite Aid. Albertsons shareholders will own 70.4 percent to 72 percent of the business.
The combined company would have headquarters in Camp Hill, Pa., where Rite Aid is based, and in Boise, Idaho, where Albertsons is based. Robert Miller, the Albertsons chairman and chief executive, would serve as chairman of the combined company. John Standley, the Rite Aid chairman and chief executive, would be chief executive. The companies haven’t decided on a name for the new company.
Rite Aid agreed to sell the stores and distribution centers to Walgreens for $4.38 billion last year. At the end of the third quarter, Rite Aid had about 4,400 locations after transferring a small number of stores to Walgreens. Rite Aid reported revenue of $32.8 billion in its most recent fiscal year, which ended in March.
Albertsons would continue to operate some stand-alone Rite Aid pharmacies and plans to rebrand its in-store pharmacies as Rite Aid. Albertsons currently operates more than 2,300 stores in 35 states and the District of Columbia under several different brands. It also operates more than 1,700 in-store pharmacies as part of its business. Albertsons said it has $59.7 billion in annual sales.
The deal is expected to close in the second half of the year. The companies said they expect to save $375 million annually within about three years. The transaction is subject to regulatory and shareholder approval.