Rite Aid & Albertsons to Merge to Better Meet Customers' Needs

Rite Aid & Albertsons to Merge to Better Meet Customers' Needs

Rite Aid & Albertsons to Merge to Better Meet Customers' Needs

The integrated company will operate approximately 4,900 locations and 4,350 pharmacies in 38 states and Washington, D.C. The Stock has YTD (year to date) performance of 8.12 percent. CVS Health said in December that it would merge with Aetna, the health insurer, in a $69 billion deal that could potentially reshape the way health care is delivered in the United States.

The stock of Rite Aid Corporation and Commercial Metals Company were two of the most active stocks on Monday. Rite Aid has thousands of drug store locations as well as a benefits-management company that has millions of members. According to today's trading volume Rite Aid Corporation is BELOW its 20-Day Avg. volume with the stock showing BELOW Abnormal volume in the past 150 days. Walgreen tried unsuccessfully to buy all of Rite Aid previous year but scuttled that deal after encountering regulatory resistance. Rite Aid has regulatory approval to sell 1,932 stories to Walgreens Boots Alliance Inc. for $4.38 billion.

Signs posted outside the Pepperell store say the pharmacy is now a Walgreens. Because the combined company will be publicly traded, the Rite Aid deal will give Cerberus a path to exit its investment without having to do an IPO in a volatile market.

Most Albertsons pharmacies will be given the Rite Aid name, and the combined company will continue to run Rite Aid stand-alone pharmacies, the companies said. Bank of America Merrill Lynch also served as financial advisor to Albertsons and is providing committed financing for the proposed transaction together with Credit Suisse and Goldman Sachs. In addition to Albertsons stores, the company's brands include Safeway and Shaw's.

"I think that the customer experience needs to be a bit more than just, "Oh, I just go to the pharmacy", or 'Oh, I just go to the grocery store, '" said David Grasso, business editor at Bold Media. 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. Rite Aid owns about 2,569 drug stores, after it sold 1,932 pharmacies to Walgreens for $4.38 billion. Like its drugstore chain competition, Rite Aid operates walk-in clinics that can deal with cases of the flu, sinus infections and other relatively minor complaints. Amazon, for example, is said to be in talks about entering the pharmacy business.

Rite Aid shares surged on the news, first reported by the Wall Street Journal, with shares up as much as 31 per cent in pre market trading in NY.

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Shares of Rite Aid Corporation (RAD) changed at hands on unusually higher volume along the stock price move of 3.29% to 2.2.

Shareholders of Rite Aid will own up to 29.6 percent of the new company while shareholders of Albertsons will own up to 72.6 percent of the new company.

According to the Albertsons Companies website, there are now no stores under their ownership in Schuylkill County, and the nearest such store to our area, a Safeway, is located in Wilmington, Delaware.

Current Rite Aid chairman and chief executive officer John Standley will become CEO of the combined group, with current Albertsons chairman and CEO Bob Miller serving as chairman. Rite Aid Corp (NYSE:RAD) has a market cap of $2.29 Billion and the number of outstanding shares have been calculated 1.04 Billion.

The Associated Press contributed to this article.

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