(Reuters) - U.S. grocery chain operator Albertsons Companies Inc said on Tuesday it would buy drugstore chain Rite Aid Corp <RAD.N> in a cash-and-stock deal to create a company with $83 billion in revenue.
Rite Aid shares rose as much as 31 percent in premarket trading and were set to open at more than a five-month high of $2.80.
Rite Aid shareholders will have the right to receive either one share of Albertsons common stock plus about $1.83 in cash or 1.079 shares of Albertsons stock in exchange for every 10 Rite Aid shares.
Depending on the outcome of the tender offer, Rite Aid is expected to own a 28 percent to 29.6 percent stake in the combined company, while Albertsons' shareholders will own a 70.4 percent to 72.0 percent stake, the companies said in a statement.
Albertsons is backed by an investment group led by Cerberus Capital Management that also includes Kimco Realty Corp <KIM.N>, Klaff Realty LP, Lubert-Adler Partners LP and Schottenstein Stores. The Wall Street Journal first reported the deal on Tuesday. http://on.wsj.com/2EIx9gY
(Reporting by Shalini Nagarajan and Vibhuti Sharma in Bengaluru; Editing by Shailesh Kuber and Anil D'Silva)