Grocery chain Albertsons announced plans Tuesday to acquire Rite Aid in a cash along with stock deal, as the traditional grocery industry continues to look for growth by broadening offerings, not just store base.
A combined Albertsons along with Rite Aid could have a value of roughly $24 billion, including debt. When the deal closes, Albertsons shares will trade on the completely new York Stock Exchange. Albertsons in 2015 filed an IPO the idea had hoped could value the idea at as much as $24 billion, including debt, however the idea canceled which plan.
This specific deal follows Rite Aid’s failed attempt in 2015 to sell to its 4,0 stores to Walgreens. which deal was whittled down by regulators to a purchase of 1,932 stores for $4.37 billion.
Rite Aid features a market value of $2.31 billion. The combined company is actually supposed to have roughly $14 billion in net debt, according to credit ratings firm Moody’s. which figure could vary depending on how shareholders choose to be compensated for the deal.
Upon the deal’s closing, Rite Aid will own up to a 29.6 percent stake within the combined company along with current Albertsons shareholders will own up to 72 percent.
The completely new company’s revenues could be about $83 billion.
Rite Aid Chairman along with CEO John Standley will become CEO of the combined company, along with Albertsons chairman along with CEO Bob Miller will be chairman of the completely new company.
Shares of Rite Aid were up 1.2 percent in late morning trading after skyrocketing as much as 30 percent before the opening bell.
The deal with Albertsons underlines the change in course which retailers are taking, no longer looking to expand only by real estate footprint, however also by capability. Increasingly, retailers are looking to pharmacies due to This specific expansion, which can take advantage of the frequency with which people buy prescription drugs. There is actually also the opportunity to use store footprints as a base for drug delivery along with pick up.
CVS Health late last year announcedits intent to acquire Aetna for roughly $69 billion. Walgreens is actually currently said to be in early-stage talks to acquire drug wholesale company AmerisourceBergen, The Wall Street Journal has reported.
These moves come as the health-care sector itself is actually under pressure. Amazon recently announced plans to team with Berkshire Hathaway along with J.P. Morgan to craft a start-up to lower employee health costs.