Grocery chain Albertsons signed on to buy the portion of Ride Aid that isn't being sold to Walgreens.
Last year, Walgreens announced an agreement to buy almost 2,000 Rite Aid stores after an offer to buy the entire company fell apart.
Albertsons announced this morning that they are buying the remaining Rite Aid stores that Walgreens did not purchase. Albertsons, which also owns Safeway stores, would rebrand its in-store pharmacies under the Rite Aid name, and would continue to operate some stand-alone Rite Aid pharmacies.
"Drug retailing has had its own challenges with reimbursement pressure and weak front-end sales as evidenced in Rite-Aid's weak profits over the last couple of years", said Mickey Chadha, a vice president with credit ratings agency Moody's.
The combined company says it will have dual headquarters, in Boise and in Rite Aid's current base in Camp Hill, Pennsylvania.More news: Almost 80 flu deaths in Georgia reported this year
The merger is expected to create savings of $375m, a joint statement said.
The combined company would have about 4,900 locations in 38 states and the District of Columbia, the companies said. But it also shrank Rite Aid so dramatically at a time the pharmacy industry is only getting more competitive, giving large companies more clout to negotiate with drugmakers and other suppliers. Albertsons reportedly put its IPO filing plans on hold in July 2017 after the Amazon-Whole Foods merger, two years after initially postponing such a listing.
The Idaho-based grocer is offering either a share of its stock and $1.83 in cash, or slightly more than a share for every 10 shares of Rite Aid, the AP said. Now there is a new deal with grocery chain Albertsons.
Rite Aid Chairman and CEO John Standley would become CEO of the combined company, and Albertsons Chairman and CEO Bob Miller will be Chairman.
After the deal closes, Albertsons' shares will be listed on the New York Stock Exchange. The combined company's expanding omni-channel platform will provide customers with convenience, choice, and flexibility through multiple in-store formats, digital channels, and same-day food and prescription delivery options from stores and via Drive Up & Go. In 2015 alone, with the help of generous customers, Albertsons Companies and the Albertsons Companies Foundation gave more than $270 million in food and financial support to the more than 2,300 communities they serve.