Albertsons, Rite Aid Terminate Merger Agreement
Albertsons Cos. Inc. and Rite Aid Corp. have mutually agreed to terminate their planned merger.
Citing the views expressed by the drug store chain’s stockholders as the reason, Rite Aid Chairman and CEO John Standley said his company is “committed to moving forward and executing” its strategic plan as a stand-alone company, even though it “believed in the merits” of the merger.
"We remain focused on leveraging our network of conveniently located retail pharmacies, our EnvisionRxOptions PBM and our trusted brand of health-and-wellness offerings,” he noted. “We will continue building momentum for key areas of our business like our innovative Wellness store format, highly successful customer loyalty program and expanded pharmacy service offerings, as we also enhance our omnichannel and own-brand offerings to strengthen our competitive position and create long-term value for stockholders."
As a result, the special meeting of Rite Aid’s stockholders planned for Aug. 9 will not take place. Under the terms of the merger agreement, neither company will be responsible for payments to the other party as a result of the termination.
Rite Aid also announced its board of directors is evaluating governance changes at the company. As it considers these changes, Rite Aid will continue to engage with stockholders to ensure alignment between the company and its investors.
The two companies revealed the planned merger in February, when they agreed that the privately held grocer would merge with the publicly traded drug store chain. The transaction was anticipated to close in the second half of 2018.
Under the deal, current Rite Aid Chairman and CEO John Standley would have become CEO of the new entity, and current Albertsons Cos. Chairman and CEO Bob Miller would have become chairman. The new organization was expected to comprise leadership from both companies and would have been based in Boise, Idaho, and Camp Hill, Pa., where Albertsons Cos. and Rite Aid, respectively, are currently based.
Albertsons Cos. operates 2,300 retail food and drug stores with 1,762 pharmacies, 397 associated fuel centers, 23 dedicated distribution centers, five Plated fulfillment centers and 20 manufacturing facilities. It operates stores under such banners as Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Sav-On, Jewel-Osco, Acme, Shaw's, Star Market, United Supermarkets, Market Street, Amigos, Haggen and United Express. It holds the No. 3 spot on Progressive Grocer’s 2018 Super 50 list of top grocers in the United States.
Rite Aid Corp. is one of the nation's leading drug store chains, with fiscal 2018 annual revenues of $21.5 billion. The company also owns EnvisionRxOptions, a multifaceted health care and pharmacy benefit management company supporting a membership base of more than 22 million members; RediClinic, a convenient care clinic operator with locations in Delaware, New Jersey, Pennsylvania, Texas and Washington; and Health Dialog, a provider of population health management solutions, including analytics, a multichannel coaching platform and shared decision-making tools.