Privately-held Albertsons plans to buy the rest of Rite Aid that isn't being sold to Walgreens Boots Alliance.
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.
The merger with Albertsons includes every Rite Aid location not acquired previous year in a partial buyout by the company that operates Walgreens pharmacies.
Whether that's enough to compete with Amazon remains to be seen. Before coming to Rite Aid, he was CEO of Fred Meyer, a grocery chain in the Northwest U.S.
Amazon is also seeking to upend the health care field.
With those things in mind, In late January, Amazon, Berkshire Hathaway, and JPMorgan Chase announced they would pool resources to create a health care savings consortium for their 1.5 million employees.
Rite Aid Co. has a 52-week low of $1.38 and a 52-week high of $6.15.
Amazon's competitors also are bulking up health care services, which can not be purchased online.Late a year ago, Rite Aid rival CVS Health Corp. said it would buy the health insurer Aetna for $69 billion. And, as reported in CNN, Walgreens wanted to buy up all of Rite Aid in 2015, but federal regulators rejected that agreement on antitrust grounds. The companies settled on the smaller deal instead.
Shares of Rite Aid Corp (NYSE:RAD) now have an Average Brokerage Recommendation of 3, number of Recs in ABR is 8 while industry rank of the company by ABR is out of 265. State of New Jersey Common Pension Fund D now owns 6,100,000 shares of the company's stock worth $11,956,000 after acquiring an additional 100,000 shares during the period.More news: Broadcom and Qualcomm still jousting over buyout price
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As for Rite Aid stores that will become a part of Albertsons, Flower said customers can now expect the store to continue normal business operations.
This powerful combination enables us to become a truly differentiated leader in delivering value, choice, and flexibility to meet customers' evolving food, health, and wellness needs...
Current Rite Aid Chairman and Chief Executive Officer John Standley will become chief executive officer of the combined company, the release states, and current Albertsons Companies Chairman and Chief Executive Officer Bob Miller will serve as chairman. The deal is expected to close later this summer, the companies said Tuesday, when Kimco will also have a better idea of the market value of its stake in Albertsons. The bet is that the increased foot traffic to the in-house pharmacies will bring more customers to Albertsons' food aisles.
Rite Aid's stock closed at $2.20 per share on Tuesday, Feb. 20, down from $5.95 per share one year ago. However, by last summer the deal had been tweaked, with Rite Aid agreeing to transfer roughly 2,000 stores to Walgreens.
Pharmacy operations can strengthen customer loyalty for food retailers.
Albertsons said it has $59.7 billion in annual sales.
Beyond that both chains have invested in improving their beauty and wellness products and remodeled many stores, something that was hard for Rite Aid to do, struggling with all that debt.
Chad Bray is a New York Times writer.