Albertsons Cos. and Rite Aid Corp. have mutually agreed to terminate their previously announced merger agreement because Rite Aid stockholders did not believe in the benefits of the merger.
In a press release, Boise, Idaho-based Albertsons issued this statement in regard to the termination:
“Albertsons Cos. believes that the strategic rationale of the Rite Aid combination was compelling, including the $375 million of cost synergies and $3.6 billion of identified revenue opportunities. We disagree with the conclusion of certain Rite Aid stockholders and third-party advisory firms that although they acknowledged the strategic logic of the combination, did not believe that Albertsons Cos. was offering sufficient merger consideration to Rite Aid stockholders. Consistent with Albertsons Cos. disciplined approach to mergers and acquisitions, and after careful consideration of all information available to our board of directors through today, we were unwilling to change the terms of the merger.”
Camp Hill, Pa.-based Rite Aid Chairman and CEO John Standley said in a statement: "While we believed in the merits of the combination with Albertsons, we have heard the views expressed by our stockholders and are committed to moving forward and executing our strategic plan as a stand-alone company. We remain focused on leveraging our network of conveniently located retail pharmacies … and our trusted brand of health and wellness offerings. 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 omni-channel and own brand offerings to strengthen our competitive position and create long-term value for stockholders."
Albertsons added that it has “remained laser focused on execution to drive our financial and operating performance, while ensuring we continue to meet and exceed the needs of our customers.” The retailer said it has continued to differentiate itself through “our best-in-class Own Brands portfolio that is expected to add over 1,100 new items this year as well as through our expanding e-commerce offerings, which grew 108 percent year-over-year in the first quarter.
Albertsons is one of the largest food and drug retailers in the U.S. with both a strong local presence and national scale. It operates stores across 35 states and the District of Columbia under 20 well-known banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s and others.
Rite Aid is one of the nation's leading drugstore chains with fiscal 2018 annual revenues of $21.5 billion.