Acme owner to buy drugstore chain Rite Aid

Aaron Brown
February 23, 2018

In all, the new company is expected to serve more than 40 million USA customers a week at around 4,900 locations, 4,350 pharmacy counters and 320 health clinics across the U.S. Shareholders of Boise, Idaho-based Albertsons, which is now private held, will own more than 70 percent of the combined company.

The operation will have headquarters in Boise, Idaho, and Camp Hill, Pa., and the name of the combined company will be determined by the time the merger is completed.

The S&P index for drug retail has fallen 11% in the past year, and the big 3 pharmacies are all scrambling to keep their footholds: In addition to Walgreens' purchase of 2k Rite Aid stores, CVS has a $69B purchase of healthcare company Aetna now under regulatory review.

Miller said the new company would "enable us to even better serve the valuable pharmacy customer by providing a fully integrated one-stop shop for our customers' food, health and wellness needs".

"The combined platform positions Rite Aid to capitalize on our pharmacy expertise and expand and enhance our pharmacy footprint", he said. "We are confident that delivering improved customer experiences and value will drive growth and profitability while creating compelling long-term value for shareholders". The company said that operational issues were the reason for the slowed growth in the US e-commerce business, and also the cut in marketing to its latest online venture Jet.

The deal includes Rite Aid sites in Washington state.

Included in the merger are the Rite Aid locations in Shenandoah, Ashland, Mahanoy City, and Frackville.

The move comes during a flurry of activity in the pharmacy sector.

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Walgreens is reportedly in early talks with drug distributor AmerisourceBergen (ABC) after already owning about one-fourth of AmerisourceBergen's shares. Vetr raised shares of Rite Aid from a "hold" rating to a "strong-buy" rating and set a $2.54 price objective for the company in a report on Tuesday, January 16th.

Albertsons said it would convert its existing pharmacies to Rite Aid stores and let existing Rite Aid outlets operate as stand alone pharmacies.

Last week, Rite Aid announced it had sold 1,114 stores and related assets to Walgreens, including its stores in Chattanooga, for $2.4 billion.

Over the past few months, drugstore chains have been at the center of a number of big mergers and acquisitions, as different segments of the traditional retail industry struggle to redefine themselves. The prognosis is mixed, says Jay Jacobowitz, president and founder of Retail Insights. So far so good. The firm has a market capitalization of $2,270.00, a P/E ratio of 19.36 and a beta of 1.76. And, with retail stocks in general being hammered by the disruption of online shopping, it is a buyers' market.

Since October 3, 2017, it had 0 insider buys, and 1 insider sale for $58,915 activity.

But the proposed deal with Albertsons would suddenly make Rite Aid a lot larger.

Rite-Aid has worked to recover from an accounting scandal and lackluster earnings. "It just won't be very pretty". Hsbc Holdg Public Ltd Liability Company holds 0% or 473,949 shares in its portfolio. The new company will reportedly be ranked first or second in 66 percent of the top metropolitan areas in the United States and in 70 percent of pharmacy locations.

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