Rite Aid Shares Plunge After Announcing $24 Billion Merger With Albertsons Terminated

Rite Aid (RAD) shares plunged in early trading on Thursday after the company said its proposed merger with Albertsons Companies was canceled.

The companies said in a statement on Wednesday that they’d made a mutual decision to terminate the $24 billion merger, which was originally announced in February. The transaction had been under scrutiny from investors and shareholders.

Rite Aid shares dropped more than 11% in early trading.

Chief Executive John Standley said in a statement that Rite Aid is now committed to “moving forward and executing our strategic plan as a standalone company.” The announcement came a day before a planned special meeting of Rite Aid shareholders in which they were expected to vote on the transaction.

Under the terms of the merger agreement, neither Rite Aid nor Albertsons will be responsible for any payments to the other party as a result of the termination of the merger agreement.

Rite Aid said its board of directors is evaluating changes in how the company is governed. Management said it will talk to stockholders to “ensure alignment” between the company and its investors. It also announced it will hold its annual meeting on Oct. 30.

Albertsons said in a statement that it disagrees with the criticism of the deal by Rite Aid shareholders and investors that didn’t believe the company was offering sufficient consideration. The deal was expected to result in $375 million in cost synergies and $3.6 billion in identified revenue opportunities, Albertsons said.

“Consistent with Albertsons Companies’ disciplined approach to mergers and acquisitions, and after careful consideration of all information available to our board of directors through today, we were unwilling to change the terms of the merger,” the statement said.