US drugstore chain operator Walgreen to acquire rival Duane Reade for $1.08 billion

Walgreen Company, the largest drugstore chain operator in the US has agreed yesterday to acquire New York drugstores chain firm Duane Reade Holdings Inc for $1.08 billion including debt.

Illinois-based Walgreen, which operates 7,147 drugstores across 50 states in the US, said yesterday that it has enterd into a deal to acquire Duane Reade from affiliates of private equity firm Oak Hill Capital Partners in a cash transaction for $1.075 billion, which includes the assumption of debt.

Walgreens will be paying about $623 million to Duane Reade and assume $457 million of Duane Reade's debt.

The proposed acquisition will bring to Walgreens all 257 Duane Reade stores located in the New York City metropolitan area, as well as its corporate office and two distribution centres.

With Walgreens currently operating 70 stores in the New York City metropolitan area, the drug store chain operator will be operating 327 stores in the city.

Walgreens will fund the purchase with existing cash and anticipates the transaction will close in its current fiscal year, which ends 31 August.