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Drug store chain Rite Aid Corp and U.S. grocer Albertsons Companies Inc. agreed to terminate their merger agreement, the companies said on Wednesday, a little over 10 days after a shareholder advisory firm opposed the deal.

Last month, Institutional Shareholder Services Inc (ISS) had said that Rite Aid investors should vote down its US$24-billion merger with Albertsons saying the agreement was not going to give the drug store chain’s shareholders a “fair ownership interest” in the combined company.

The ISS report was seen as a blow to Albertsons and its majority owner, private equity firm Cerberus Capital Management LP, who were hoping that the deal will help them win a new business amid pressure from retailer Amazon.com Inc. and Walmart Inc.

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Also opposed to the deal is Highfields Capital Management, which is Rite Aid’s fourth-largest shareholder, owning 4.4 per cent of Rite Aid’s outstanding shares as of the most recent filings with regulators.

Albertsons said it disagreed with the view that the U.S. grocer was not offering sufficient merger consideration to the shareholders of Rite Aid, who were to get 30 per cent of the combined company under the terms of the agreement.

Rite Aid chief executive John Standley said the company heard the views of its shareholders and would operate as a standalone firm. Albertsons said it was unwilling to change the terms of the agreement.

The U.S. grocer had hoped that the deal, which was seen as part of a wave of consolidation in the drug retailing sector, would help Albertsons become a formidable competitor to CVS Health Corp and Walgreens Boots Alliance Inc., while also giving its private equity owners a way to cash out on their decade-long investment in the company.

Cerberus first took a stake in Albertsons in 2006 and the retailer became the dominate grocery franchise on the West Coast when Cerberus bought Safeway in 2014.

Under the settlement agreement, neither of the companies would be responsible for any payments as a result of the termination, Rite Aid said in a statement on Wednesday.

The drug store chain also said it was evaluating governance changes at the company.

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Albertsons reiterated its fiscal 2018 guidance on Wednesday, including an expectation for earnings before interest, taxes, depreciation and amortization (EBITDA) of US$2.7-billion.

Rite Aid’s shares have fallen by about 21 per cent since the deal was first announced in late February.

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