Grocery retailer Albertsons to buy drugstore chain Rite Aid

Rite Aid

Willy Churchill leaves a Rite Aid store in Oakland

The combined Albertsons and Rite Aid company, which will be renamed according to the Wall Street Journal, will operate around 4,900 stores and 4,300 pharmacies, along with 320 clinics. Shareholders of Boise, Idaho-based Albertsons, which is now privately held, will own more than 70 percent of the combined company. Leadership from both companies will run the company, which will be dually headquartered in Boise, Idaho and Camp Hill, Pennsylvania. Albertsons, which also owns Safeway stores, would rebrand its in-store pharmacies under the Rite Aid name, and would continue to operate some stand-alone Rite Aid pharmacies.

According to a brochure sent to Rite Aid pharmacy customers, stores that are converting to Walgreens will install new systems over the next two to three years.

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. "We are confident that delivering improved customer experiences and value will drive growth and profitability while creating compelling long-term value for shareholders".

"The hallmark of Albertsons Companies' business has been to become the favorite local supermarket of our customers", said Bob Miller, Albertsons Companies Chairman and Chief Executive Officer. At the checkout counter, brochures state "This Rite Aid will become Walgreens" and answers questions about how the transition will affect the store and their prescriptions. Deutsche Bank began coverage on shares of Rite Aid in a report on Monday, December 4th.

The move comes after 7 months positive chart setup for the $2.25B company.

Walgreens is reportedly in early talks with drug distributor AmerisourceBergen (ABC) after already owning about one-fourth of AmerisourceBergen's shares.

Rite Aid, based in Camp Hill, Pa. with sales of $32.8 billion a year ago, has struggled with high debt levels and tough competition from CVS and Walgreen, as narrowing drugstore networks have pushed customers away from its stores. Camp Hill, Pa. -based Rite Aid will get a buyer after a failed merger past year.

But with the help of Rite Aid and recent investments in online grocery, including a partnership with Instacart and the acquisition of meal kit provider Plated, the grocery giant appears to have itself well situated for a public push.

The combined company expects to deliver $375 million in cost reductions. So far so good. Lincoln Natl Corp owns 19,283 shares or 0% of their USA portfolio. "The company has struggled for better than a decade to consistently grow, and its far-flung and complex components I believe are the major reason for this lack of progress". And, with retail stocks in general being hammered by the disruption of online shopping, it is a buyers' market. We have $1.96 PT which if reached, will make NYSE:RAD worth $85.52 million less. Walgreens bought nearly 2,000 Rite Aid locations, mostly in the South and Northeast.

He adds Rite Aid is one of the county's largest employers. "It just won't be very pretty". First and foremost, it will allow the company to finally go public. The new company will have an expanded footprint and be ranked first or second in 66% of the top metropolitan areas in the USA and will be ranked first or second in 70% of pharmacy locations.

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