The merger of Albertsons Cos. and Rite Aid Corp. took another step forward with the expiration of the Hart-Scott-Rodino (HSR) waiting period for the $24 billion deal.
Pending approval of Rite Aid shareholders, regulatory clearance and other customary closing conditions, the transaction is expected to close early in the second half of 2018. The agreement, which will take privately held Albertsons public, has been unanimously approved by the boards of both companies.
"The expiration of the HSR waiting period is an important step toward completing the proposed transaction with Albertsons, which will create a truly differentiated leader in food, health and wellness to meet the evolving needs of customers," Rite Aid Chairman and Chief Executive Officer John Standley said in a statement. “We remain focused on combining our two organizations to drive growth, profitability and long-term shareholder value.”
Announced in late February, the merger will join the nation’s second-largest supermarket operator with its third-largest drug chain. Overall, the company will generate pro forma revenue of roughly $83 billion and operate about 4,900 stores, 4,350 pharmacies and 320 in-store health clinics across 38 states and Washington, D.C., serving more than 40 million customers per week.
Plans call for Standley to become CEO of the merged company, with current Albertsons Chairman and CEO Bob Miller serving as chairman. The company will be managed by executives from both organizations and have dual headquarters in Boise, Idaho, and Camp Hill, Pa.
The name of the merged company is expected to be determined by the close of the transaction. Most Albertsons Cos. pharmacies are slated to be converted to the Rite Aid banner.
Albertsons shareholders would hold a majority stake in the combined company. Under the agreement, Rite Aid shareholders — in exchange for every 10 shares of Rite Aid common stock — can elect to receive one share of Albertsons Cos. common stock plus about $1.83 in cash or 1.079 shares of Albertsons Cos. stock. Depending on the results of cash elections, Rite Aid shareholders would own a 28% to 29.6% stake and current Albertsons Cos. shareholders would own a 70.4% to 72% stake in the combined company on a fully diluted basis.