Asset sale winds down as focus shifts to Albertsons deal
CAMP HILL, Pa. — Rite Aid Corp. is winding down its asset sale to Walgreens Boots Alliance (WBA) with the ownership transfer of 537 more stores.
Rite Aid said Tuesday that as of March 2, it has transferred 1,651 stores and related assets to WBA for cash proceeds of $3.6 billion. The process has progressed steadily. Through early February, 1,114 Rite Aid stores had been turned over to WBA for $2.424 billion.
Under the Rite Aid asset sale announced Sept. 18, WBA agreed to acquire 1,932 stores, three distribution centers and related inventory for $4.375 billion in cash. Rite Aid has said it plans to use the proceeds to pay down debt.
Rite Aid aims to wrap up the store transfers in the spring. Upon completion of the deal with WBA, Rite Aid will have 2,569 drug stores served by six distribution centers, with a strong retail presence in California, Pennsylvania, Michigan, Ohio, New York, New Jersey, Washington and Oregon.
As the Rite Aid asset sale has moved forward, the company inked a deal to become part of a much larger enterprise. On Feb. 20, Rite Aid and food and drug retailer Albertsons Cos. unveiled an agreement to merge in a transaction valued at about $24 billion. Albertsons Cos. shareholders would hold a majority stake in the combined company, which will be public.
Plans call for current Rite Aid chairman and chief executive officer John Standley to become CEO of the merged company, with current Albertsons Cos. chairman and CEO Bob Miller serving as chairman. Most Albertsons Cos. pharmacies are slated to be rebranded as Rite Aid, and the company will continue to operate Rite Aid stand-alone pharmacies.
The transaction is expected to close early in the second half of 2018, pending approval of Rite Aid shareholders, regulatory approvals and other customary closing conditions.
Albertsons-Rite Aid would generate pro forma revenue of approximately $83 billion and operate about 4,900 stores, 4,350 pharmacy locations and 320 in-store health clinics across 38 states and Washington, D.C..