Late on Aug. 8, Albertsons and Rite Aid announced that they had “mutually agreed to terminate their merger agreement. The announcement came a day before Rite Aid shareholders were scheduled to vote on the deal.
The merger that was announced in February 2018 as a $24 billion deal, would have provided Albertsons with the option of taking its company public. The combined company would have had roughly 4,900 locations, 4,350 pharmacies and 320 clinics. Industry experts believed the deal was a step in the right direction as both companies are competing with strong competitors in their respective channels.
The failure of the deal occurred after key Rite-Aid investors Highfields Capital Management, Glass Lewis and Institutional Shareholder Services opposed it, believing they would not receive benefits when the company would go public and wanted a higher price.
“After careful consideration of all information available to our board of directors through today, we were unwilling to change the terms of the merger,” Albertsons said in a statement.
Rite Aid CEO John Standley said in a statement, “While we believed in the merits of the combination with Albertsons, we have heard the views expressed by our stockholders and are committed to moving forward and executing our strategic plan as a standalone company.”