Albertsons and Rite Aid have mutually agreed to terminate their previously announced merger plan.
Albertsons cited objections to the deal from some Rite Aid shareholders as the underlying reason for the termination.
In a statement, Albertsons noted 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 was offering sufficient merger consideration to Rite Aid stockholders. Consistent with Albertsons’ disciplined approach to mergers and acquisitions, and after careful consideration of all information available to our board of directors, we were unwilling to change the terms of the merger.”
In a statement, John Standley, Rite Aid chairman and CEO, said, “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. We remain focused on leveraging our network of conveniently located retail pharmacies, our EnvisionRxOptions PBM 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, customer loyalty program and expanded pharmacy service offerings, as we also enhance our omnichannel and own brand offerings to strengthen our competitive position and create long-term value for stockholders.”
Under the terms of the merger agreement, Rite Aid maintained, neither it nor Albertsons will be responsible for any payments to the other party as a result of the merger agreement termination.
In addition, Rite Aid said that its shareholders meeting, which was to be held on August 9, will not take place. Rite Aid noted that its board of directors is evaluating governance changes at the company but will continue to engage with stockholders to ensure alignment between the company and its investors.