Retailer Albertsons to buy Rite Aid

Late-afternoon sell-off steers US stocks toward lower close

This will be achieved, according to an investor presentation, through a full suite of health-and-wellness capabilities, including specialty pharmacy offerings and in-store RediClinics in larger Albertsons Companies stores and stand-alone Rite Aid stores.

It remains to be seen whether this combination of in-store space and online and mobile innovation will pay off for Albertsons, which still doesn't have the sheer reach of Amazon, despite its many locations.

As more people shop online, he says retailers are searching for new and more convenient ways to deliver products, like groceries and prescription drugs.

And the grocer's private-equity owners would exit their 2006 investment without having to go through an initial public offering of stock in a turbulent market.

Once the merger takes place, there will be almost 4,900 company locations, with 4,350 pharmacy counters and 320 clinics across 38 states and Washington, D.C.

Albertsons announced it will acquire more than 2,500 Rite Aid stores for an undisclosed amount, creating a company with estimated revenues of $83 billion, according to a news release.

Retailers have been pushing home deliveries and other customer-friendly services in the wake of expanded competition from Amazon.

- Walmart (WMT) stumbled Tuesday, sinking 10% to a session low of $94.35 a share, after the retail giant disappointed Wall Street with its Q4 earnings and upstaged above-consensus sales for the same period and an improved FY19 sales outlook.

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The result has been consolidation. Late a year ago, CVS Health agreed to buy Aetna for $77 billion.

Consumer stocks were broadly lower today, with shares of consumer staples companies in the S&P 500 sinking over 2.1% this afternoon while shares of consumer discretionary firms in the S&P 500 were falling almost 0.4%.

"Both players are under massive profit pressure, and there is no clear solution to their competitive/margin threats via this combination", Muken said. If the deal is approved by shareholders and regulators and closes in the second half of 2018 as expected, the grocery chain - which has more than 2,300 stores in 35 states and the District of Columbia under the Albertsons, Safeway and other brands - would substantially expand its geographic footprint.

How many stores will the combined company have?

The deal includes Rite Aid sites in Washington state. That merger fell apart amid scrutiny by U.S. antitrust authorities.

When Walgreens' proposed acquisition of rival Rite Aid fell through a year ago because of regulatory resistance, Walgreens agreed to purchase about 2,000 Rite Aid locations, leaving Rite Aid a much smaller company. Instead, September, the two companies announced a scaled back version for almost 2,000 of Rite Aid's stores. After it closes, Albertsons shareholders will own 70.4 percent to 72 percent of the business, the companies said.

Boise-based Albertsons Cos. operate stores across 35 states and Washington, D.C., under 20 banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen and Carrs, as well as meal kit company Plated based in NY.

"We are keeping (the stores) informed at every step as this transition occurs so we can work together to make sure the transition (is) as smooth for all concerned, team members and customers alike", Graham wrote in an email.

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