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American retailer Albertsons has acquired its competitor Rite Aid, after the latter had already sold a series of stores to Walgreens. The acquisitions are mainly a reaction to Amazon and other online players’ onslaught.
83 billion dollar turnover
Store chain Walgreens was close to a Rite Aid acquisition a while back, but the American Bureau of Competition blocked the merger. The buyer had to be happy with 1,900 of Rite Aid’s 4,600 stores. Albertsons will now acquire the remaining 2,700 stores.
The Albertsons group is known for its eponymous supermarket chain, but also own another nineteen store chains, including Safeway. Albertsons will get 71 % of the new merger company and Rite Aid’s investors will get the rest. The new company will be worth about 24 billion dollar (nearly 20 billion euro) and will have a 83 billion dollar turnover (67 billion euro). The merger will need to help cut 375 million dollar (300 million euro) in costs every year.
Size of scale
Both companies say that the merger is the best way to stay combative in the growing online market and particularly to fight Amazon, according to The Wall Street Journal. Amazon is increasingly present in the physical market, which means that scale will become more important for other companies. The group will operate 4,900 stores and another 4,300 apothecaries.
Rite Aids’ acquisition also brings Albertsons to the stock exchange for the first time. It wanted to go public in 2015, but decided not to. This time around, it will obtain Rite Aid’s public listing on the American stock exchange.
Walmart
Walmart’s online third quarter turnover grew more than 50 %, but that growth dropped to 23 % in the fourth quarter. That was still a sizeable increase, but still below analysts’ expectations. These analysts look at its online growth to see how it can compete with Amazon.
According to Walmart, Jet.com’s weaker performance was the main culprit, but that did not satisfy investors. In total, Walmart generated a 500.3 billion dollar (407 billion euro) turnover, which is 3 % better than in 2016. Online turnover grew 44 %, but its operational profit dropped 40.1 % to 20.4 billion dollars (17 billion euro).
