Rite Aid gains after Albertsons agrees to the buy the drugstore chain (RAD)

pulse

February 20, 2018 4:17 PM

The private-held Albertsons announced that it will acquire Rite Aid in a cash and stock deal.

The resulting merger will bring in an expected $83 billion in 2018 revenue.
After the deal closes, Albertsons' shares will be listed on the New York Stock Exchange.

Shares of Rite Aid popped Monday after Albertsons, the privately-held owner of Safeway and Vons, announced plans to acquire and merge with the drugstore chain in a cash-and-stock deal.

Albertsons will buy the remainder of Rite Aid that will not be sold off to Walgreens Boots Alliance. Walgreens has made several attempts to buy Rite Aid, and a $17.2 billion merger agreement was terminated due to intense scrutiny by antitrust regulators. In June 2017, Walgreen said it would acquire 2,186 Rite Aid stores, and related assets for $5.18 billion in cash.

Once the Albertsons and Rite Aid deal is complete, Albertsons shares will trade on the New York Stock Exchange. Albertsons shareholders will own 70.4% to 72% of the combined company on a diluted basis, and Rite Aid shareholders will own 28% to 29.6%.

Under the agreement, Rite Aid shareholders will be able to receive either one share of Albertsons common stock as well as $1.83 in cash or 1.079 shares of Albertsons stock for every 10 shares of Rite Aid.

The combined company expects to operate approximately 4,900 locations, 4,350 pharmacy counters, and 329 clinics around 38 states and Washington, D.C. They anticipate revenues of $83 billion in 2018, according to a joint statement.

Rite Aid's stock was trading at $2.14 per share and was up 0.7% for the year.

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