Albertsons has plans to acquire Rite Aid in a cash and stock deal.
Rite Aid has a market value of $2.31 billion.
The two will have about 4,900 locations, 4,350 pharmacy counters and 320 clinics across 38 states and the District of Columbia. Most Albertsons’ pharmacies will be rebranded as Rite Aid, and the company will continue to operate Rite Aid’s stand-alone stores.
Albertsons Cos. executives said their purchase of Rite Aid’s will help the combined company become a “leader in food, health and wellness.”
The deal with Albertsons gives Rite Aid an expansion route as the company vies to compete with Amazon, which is eyeing a potential entry into healthcare, according to USA Today.
Amazon continues to send tremors through the retailer business market.
This month, Amazon CEO Jeff Bezos has been making headlines of new initiatives for healthcare. Forbes reported Amazon together with J.P. Morgan and Berkshire Hathaway announced plans to form a joint venture designed to provide more cost-effective healthcare for their 1 million-plus employees. According to The Wall Street Journal, Amazon would also like to become a supplier of medical equipment for hospitals.
In December 2017, fellow grocer and pharmacy CVS Health announced plans to acquire Aetna in a $69 billion deal. CVS said in a statement the acquisition is in response to the increasing number of consumers taking on more responsibility for paying for their healthcare as the burden of costs is being shifted to them.
And on Feb. 12, The Wall Street Journal published an article stating that Walgreens was in talks to acquire the outstanding shares of AmerisourceBergen that it did not already own. AmerisourceBergen is a global network of companies that works across the healthcare supply chain to deliver drugs to pharmacies and patients. It acts as a distributor, logistics manager, and even liaison between drug developers and legislators.
Walmart has been an ongoing competitor with Amazon. In 2016, Walmart acquired Jet.com for more than $3 billion. Since then Walmart has added online services, acquired brands such as Bonobos and ModCloth and increased the number of items available online.
Walmart is also redesigning its website with a focus on home goods and fashion. In November 2017, Walmart announced Lord & Taylor will launch a flagship store on Walmart.com. Expected to launch in spring 2018, Walmart.com will introduce a specialized online experience offering premium fashion brands directly from the Lord & Taylor flagship. Also, it is introducing low-cost clothing brands for women, kids and plus-size customers. Retailers include Time and Tru for women, Terra & Sky for plus sizes, and Wonder Nation for kids.
In addition, Walmart announced plans to start selling e-books and audiobooks online for the first time later this year. Its partner is Rakuten, Japan’s largest e-commerce company. In the United States, Walmart will sell Rakuten’s Kobo e-readers, which are similar to Amazon’s Kindle. The Kobo platform, created by a Canadian company that Rakuten bought in 2011, currently offers readers millions of titles.
However, Walmart delivered a mixed holiday quarter with earnings falling short and online sales growth slowing sharply. Walmart’s e-commerce sales were up 23 percent in the final quarter of 2017, and soared 44 percent for the full year to $11.5 billion. But the fourth quarter’s performance reflected a steep slide from the previous three-month period when online sales jumped 50 percent.
Amazon recently acquired Whole Foods for $13.7 billion, and announced plans to do free two-hour deliveries to its Prime members in four cities: Austin, Cincinnati, Dallas and Virginia Beach.
In the last three months of 2017, Amazon saw its profit more than double to reach a record of $1.9 billion. Amazon’s revenue, which includes sales from Whole Foods, jumped 38 percent year-over-year. Its North America revenue jumped 42 percent to $37 billion, while international sales grew 29 percent to $18 billion.
Physical stores revenue, which primarily comes from Whole Foods, came in at $4.5 billion.
