Drugstore chain Rite Aid and food and drug retailer Albertsons have mutually agreed to terminate their previously announced merger.
“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 standalone company,” said Rite Aid Chairman and CEO John Standley. “We remain focused on leveraging our network of conveniently located retail pharmacies, our EnvisionRxOptions PBM and our trusted brand of health and wellness offerings.”
In a statement to stockholders, Albertsons executives wrote: “Albertsons Companies 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 Companies was offering sufficient merger consideration to Rite Aid stockholders. Consistent with Albertsons Companies’ 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.”
The Rite Aid board of directoirs is evaluating governance changes at the company. As it considers these changes, Rite Aid will continue to engage with stockholders to ensure alignment between the company and its investors.
Albertsons reaffirmed its fiscal 2018 outlook, which includes an expectation for adjusted EBITDA of $2.7 billion.
