Feb. 20 (UPI) -- Grocery chain Albertsons announced plans Tuesday to acquire Rite Aid, the U.S.'s third-largest drugstore chain.
The deal addresses the remaining portion of Rite Aid left over from its takeover by Walgreens last year. Walgreens bought almost 2,000 Rite Aid locations, mostly in the South and Northeast. The new joint Albertsons-Rite Aid venture, which is not yet named, will include some 4,900 locations in 38 states and Washington, D.C.
According to a statement announcing the merger, Rite Aid shareholders can exchange ten shares of Rite Aid common stock for either one share of Albertsons common stock plus roughly $1.83 in cash or 1.079 shares of Albertsons stock.
Shareholders of Rite Aid will own a 28 percent to 29.6 percent stake in the merged company and current Albertsons shareholders will own the remaining 70.4 percent to 72.0 percent.
A combined Albertsons and Rite Aid brand would value to $24 billion, including debt.
The companies said current Rite Aid Chairman and Chief Executive Officer John Standley will become CEO of the combined company and current Albertsons Companies Chairman and Chief Executive Officer Bob Miller will serve as chairman.
"This powerful combination enables us to become a truly differentiated leader in delivering value, choice, and flexibility to meet customers' evolving food, health, and wellness needs," Standley said.
The combined company is expected to generate revenues of about $83 billion in its first year.
"We have always put our customers first, and our combination with Rite Aid will enable us to even better serve the valuable pharmacy customer by providing a fully integrated one-stop-shop for our customers' food, health, and wellness needs," Miller said.