Rite Aid outlines merits of Albertsons deal for shareholders

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Rite Aid outlines merits of Albertsons deal for shareholders

By Antoinette Alexander - 06/26/2018
Rite Aid has issued a letter to its shareholders outlining the merits of its proposed merger with Albertsons. The letter comes in connection with the company’s Form S-4 — submitted as part of the merger — being declared effective by the Securities and Exchange Commission. All of this comes as the retailer readies for an Aug. 9 special shareholder meeting in an effort to gain shareholder approval for the roughly $24 billion deal.

Among the benefits of the merger Rite Aid outlined in the letter is its potential to grow the company’s scale and diversity its business. Executives not that the merger would create a top-five food and drug retailer, positioned behind Walgreens in terms of the number of pharmacy counters it has nationwide. The letter also projects a fourfold increase in revenue, reduced leverage and a potential $375 million in merger synergies by February 2022 in tandem with $3.6 billion of expected incremental revenue opportunities. The merger also would give Rite Aid access to new markets and strengthen its position in existing markets, the letter sayd.

“In the face of a consolidating and evolving marketplace, we have worked hard to defend and improve our competitive position,” the letter says. “This merger accelerates those efforts by transforming our business strategically and financially and providing shareholders with the opportunity to realize significant value anticipated from the combination.

All Rite Aid shareholders of record as of the close of business on June 22 are entitled to, among other things, consider and vote on the proposed merger with Albertsons. Rite Aid’s special shareholders' meeting will take place in New York City, and the company has set up a dedicated transaction website with resources.

Click here to view the full letter to shareholders.