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Albertsons Buying Rite Aid in Most Current Deal Remaking U.S. Retail and Healthcare Industries

Integrated Platform Will Develop an Openly Traded Grocery/Pharmacy Chain of 4,900 Locations

Albertsons Cos., one of the country’s largest grocery merchants, and drugstore chain Rite Help Corp. (NYSE: RAD) announced a conclusive merger agreement under which privately held Albertsons will acquire publicly traded Rite Help.

The combined business will operate about 4,900 shops, including 4,350 drug store locations across 38 states, with Albertsons pharmacies being converted to Rite Aid.

The offer follows Rite-Aid’s partly stopped working full merger with Walgreens Boots Alliance Inc. (NASDAQ: WBA). The offer ended up being pared down last September after failing to protect regulative approval with Rite-Aid eventually agreeing to sell 1,932 locations to Walgreens. Those sales are expected to be completed this spring.

The brand-new proposal will utilize expanded Albertsons West Coast grocery existence with Rite-Aid’s Northeast drug store presence. The merged companies will be able to offer a complete suite of health and health abilities, including specialized pharmacy offerings and in-store RediClinics in bigger Albertsons stores and stand-alone Rite Help stores.

Under the terms of the agreement, Rite Help shareholders will deserve to choose to receive either stock or a combination of stock and cash. Depending on the results of cash elections, investors of Rite Aid will own a 28% to 29.6% stake in the combined company, and current Albertsons investors will own the remainder.

Albertsons is backed by an investment consortium led by Cerberus Capital Management, which also consists of Kimco Real estate Corp. (NYSE: KIM), Klaff Realty LP, Lubert-Adler Partners, and Schottenstein Stores Corp.

. Present Rite Aid chairman and CEO John Standley will end up being CEO of the combined business, with existing Albertsons chairman and CEO Bob Miller serving as chairman.

The name of the combined company will be determined by transaction close however will continue to have head office in both Boise, ID, and Camp Hill, PA.

“This powerful combination allows us to end up being a really separated leader in providing worth, option, and versatility to meet customers’ progressing food, health, and wellness requirements,” Standley said. “The combined platform positions Rite Aid to capitalize on our drug store knowledge and broaden and boost our pharmacy footprint. We are confident that providing enhanced consumer experiences and worth will drive development and profitability while developing compelling long-lasting value for investors.”

The combined organisation is expected to produce earnings of approximately $83 billion in its first year of operation. The combined business expects to provide yearly cost synergies of $375 million in approximately three years, with a majority of the expense savings anticipated to be realized within the very first two years post-close.

The transaction has actually been authorized unanimously by the boards of directors of both business. The merger is anticipated to close early in the second half of this year, based on the approval of Rite Help’s investors, regulative approvals, and other traditional closing conditions.

The Albertsons-Rite Help tie-up continues a wave of consolidation sweeping through the retail and healthcare markets. Last year, CVS Health and Aetna consented to integrate in a $68 billion offer, while recent media reports have stated that Walgreens Boots Alliance has held initial conversations with pharmaceutical firm AmerisourceBergen.

The Cerberus consortium obtained Albertsons as part of a $3.3 billion deal with Supervalu in 2013 and later combined the business with Safeway, creating a grocery chain of 2,230 shops.

Albertsons had been reported to be preparing an initial public offering however put those plans on hold after Amazon acquired Whole Foods Market, inning accordance with media reports. The merger with Rite Aid makes it possible for Albertsons to prevent having to go through an IPO as Albertsons Companies’ shares are expected to trade on the New York Stock Exchange following the close of the deal and the share exchange.

Credit Suisse and Goldman Sachs & & Co. functioned as lead monetary advisors to Albertsons and Schulte Roth & & Zabel LLP functioned as legal advisor. Bank of America Merrill Lynch likewise served as financial consultant to Albertsons and is offering dedicated funding for the proposed deal together with Credit Suisse and Goldman Sachs.

Citi worked as exclusive monetary advisor to Rite Help, and Skadden, Arps, Slate, Meagher and Flom LLP functioned as legal advisor.

Albertsons to Sell, Lease Back 71 US Stores for $720 Million

Albertsons Cos. has actually entered into a contract to offer and rent back 71 of its stores to a Delaware-based limited-liability entity in a transaction planned to raise up to $720 million.

C.F. Albert LLC will buy the residential or commercial properties and lease each one back for a preliminary term of Twenty Years, with Albertsons booking 8 alternatives for five-year lease renewals, inning accordance with a filing by Albertsons with the U.S. Securities and Exchange Commission.

The business anticipates the sale-leaseback of the homes, subject to traditional closing conditions, will nearby Dec. 2.

The filing does not consist of a list of the properties associated with the sale leaseback contract, but lists 15 different selling entities connected with a series of big food and pharmacy chains, including Safeway, Jewel, Randall’s, Vons, Dominick’s and Wildcat.

Sales-leasebacks have in current years been a popular car for grocery chains and other holders of net-lease residential or commercial properties to monetize their owned-store portfolios.

In 2010, Cole Credit Residential or commercial property Trust III Inc. acquired Albertson’s interest in 33 retail residential or commercial properties comprising 1.9 million square feet throughout the United States for $276 million.

Haggen takes legal action against Albertsons for $1 billion over grocery offer



Numerous Vons and Albertsons shops throughout the valley were converted into Haggen grocery stores in June.

Published Tuesday, Sept. 1, 2015|5 p.m.

Updated Tuesday, Sept. 1, 2015|5:39 p.m.

BELLINGHAM, Wash.– The small grocery-store chain Haggen on Tuesday took legal action against Albertsons for more than $1 billion in damages, alleging the supermarket huge engaged in methodical efforts to remove it as a sensible rival in 5 states.

The lawsuit, filed in federal court in Delaware, accuses Albertsons of anti-competitive practices. Haggen, based in Bellingham, Wash., states those efforts required it to lay off hundreds and close nearly a fifth of the stores it had obtained from Albertsons and Safeway last December.

Previously this year, Haggen bought 146 Albertsons and Safeway stores, expanding from 18 stores in Oregon and Washington into new markets in California, Nevada and Arizona, the Seattle Times reported. Albertsons and Safeway were compelled to reject those shops to win approval by the Federal Trade Commission for their merger.

In June, Haggen converted 7 previous Vons and Albertsons shops in Southern Nevada to its brand. The chain has 3 shops in Las Vegas, three in Henderson and one in Stone City.

In a one-sentence emailed statement, Albertsons spokesman Brian Dowling said: “The claims in the claim are totally without merit.”

Tuesday’s suit also comes months after Albertsons sued Haggen in July for scams for failing to pay $41.1 million in inventory.

Haggen alleges that Albertsons acted “in a manner that was designed to (and did) hamstring muscle Haggen’s capability to successfully operate the Shops after taking ownership.”

The claim says Albertsons provided it deceptive and insufficient retail-pricing information, causing it to unwittingly inflate prices, in addition to illegally accessed Haggen’s confidential information to get the upper hand.

“Had actually Haggen known Albertsons’ true intentions, Haggen would never have purchased the Stores, nor would the FTC have permitted such a purchase,” according to Haggen’s claim.