Grocer Albertsons Cos. will acquire the remaining portion of drugstore operator Rite Aid in a deal that will create a combined leader in the food, health and wellness space.
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Combined, the two companies are worth $24B, including debt, and together they are expected to bring in more than $83B in revenue. The merged company will oversee a portfolio of 4,900 stores and 4,300 pharmacies across 38 states and Washington, D.C.
The move is said to be the best defense against e-commerce competitors like Amazon. The deal will allow Rite Aid to grow its e-commerce offerings, while Albertsons can expand its physical footprint and improve its food offerings in order to compete with rivals such as CVS Health Corp., Walgreens and Walmart, the Wall Street Journal reports.
Albertsons' shareholders will hold an estimated 71% of the combined company while Rite Aid investors will hold the remaining 29%, according to the WSJ.
Rite Aid currently has a market value of approximately $2.3B. The chain is also in the midst of selling 1,932 stores and three distribution centers to Walgreens. The $4.38B deal was finalized in September after several failed merger attempts due to antitrust concerns.
The Albertsons-Rite Aid deal is expected to close in the summer.
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