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Albertsons Buying Rite Aid to Remain Competitive, Buttress Amazon
Boise, ID-based Albertsons Cos Inc. is buying drug store chain Rite Aid Corp. in a deal involving 2,569 drug stores that would create a company with $83 billion in annual revenue. With Cerberus Capital Management’s backing, Albertsons is seeking to emerge as a formidable rival to CVS Corp. and Walgreens.
The acquisition is viewed as a way to remain competitive against large retail chains, and counter Amazon.com’s move into the space. There has been a wave of consolidations in the drug retailing sector. Additionally, Amazon made its disruptive force known when it bought Whole Foods Market, secured approval to sell drugs, and formed a healthcare entity with Berkshire Hathaway and JPMorgan Chase & Co.
Albertsons and Rite Aid notes, “The new company will have an expanded footprint and be ranked first or second in 66% of the top metropolitan areas in the United States, and will be ranked first or second in 70% of pharmacy locations.” Together, the combined company will operate roughly 4,350 pharmacy counters and 320 clinics across 38 states and Washington, DC.
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- ◦Sale/Acquisition
