Albertsons to acquire Rite Aid

A Rite Aid logo is seen outside one of their stores in New York

CVS Health Corp. agreed last year to pay about $68 billion for health insurer Aetna Inc., while the Wall Street Journal recently reported that Walgreens Boots Alliance in early talks to buy drug distributor AmerisourceBergen Corp. after its takeover of Rite Aid was scaled back last year for antitrust reasons. A deal value was not disclosed in a statement released Tuesday by the companies.

Rite Aid shares rose were up about 25 percent at US$2.66 in premarket trading.

Rite Aid chief executive John Standley will become chief executive of the combined entity, while current Albertsons chief executive Bob Miller will be chairman. It operates approximately 4,560 stores in over 30 states across the country and in the District of Columbia. Under the deal, Rite Aid has the option of joining Walgreens' group purchasing agreement to negotiate discounts on generic drug prices. Finally, Vetr downgraded Rite Aid from a "strong-buy" rating to a "buy" rating and set a $2.47 price objective for the a research note on Thursday, January 11th.

Rite Aid shareholders can elect to get either one Albertsons common share plus about US$1.83 in cash, or 1.079 Albertsons common shares for every 10 shares they hold.

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Moving toward other technical indicators, Rite Aid Corporation (NYSE:RAD)is wondering in considerable region as it has 20 days moving average of -0.02% and struggles for 50 days moving average of buoyant run is 3.50%. Rite Aid shareholder will own between 28 percent and 29.6 percent of the combined company, while Albertsons' shareholders will own the rest. 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. The combined company is expected to be comprised of leadership from both companies and will be dual headquartered in Boise, Idaho, and Camp Hill, Pa. Most Albertsons pharmacies will be rebranded as Rite Aid, and the company will continue to operate Rite Aid standalone pharmacies. The companies haven't decided on a name for the new company.

Using data analytics and integrated loyalty programs to drive growth and target new customers: The new company will capitalize on enhanced data and analytics to unlock profitable growth through new customer acquisition, new merchandising programs and demand forecasting.

A majority of the board will be independent. For Rite Aid, the deal represents another way to gain size after the federal government blocked its full sale to Walgreens, which now plans to buy roughly 2,000 of Rite Aid's stores.

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