Albertsons plans to buy Rite Aid amidst the angst of Amazon’s foray

In what may seem to be strategic move in response to the rapidly changing dynamics of the consumer shopping landscape, the U.S. supermarket operator Albertsons, recently announced that it would buy the drug store Rite Aid Corp, apparently to give itself more clout to compete against the big shots.

Reportedly, the company is looking forward to a cash and stock deal with Rite Aid. On the closing of the deal, the current Albertsons stakeholders will own over 72% and the Rite Aid will own up to 29.6% in the combined company. The combined company’s revenue is projected to be around USD 83 billion.

If sources are to be believed, the deal follows Rite Aid’s failed attempt to sell its 4600 stores to Walgreens in 2015. However, the original offer was whittled down by the regulators to a purchase deal of only 1932 stores for USD 4.37 billion.

According to Reuters, the Albertsons & Rite Aid deal is perhaps the latest in a wave of consolidation in the drug retail industry, that is supposedly looking to cut down on costs on account of lower generic drug prices and weak reimbursement rates.

Experts speculate this deal to work in favor of the Albertsons, as it would enhance its store ability to better serve the pharmacy customers – one of the deal’s many potential benefits.

In the meantime, Amazon’s entry in the grocery business by acquiring Whole Foods last year, has undoubtedly sent out ripples of anxiety among major core grocery giants such as Walmart. Experts deem that Amazon is the omnipresent foe in every realm the retail industry top-notch players contend in. The e-commerce giant’s foray is widely projected to disrupt the grocery & healthcare store business, prompting retailers to beef up their establishments, cite analysts.

In the growing battle between the old & new era of the retail industry outlook, what remains to be seen is how the retail sector magnates will fend off Amazon and work on repositioning themselves as digitally focused modern day grocers.