DEERFIELD, Ill. — Drug store giant Walgreen Co. said Wednesday it has agreed to buy Duane Reade, the iconic New York City banner, for $1.075 billion, including assumption of debt.
Walgreen said it plans to retain the name on the stores and continue the banner's current remodeling efforts, and it hopes to bolster efficiencies and strengthen the chain's pharmacy and health and wellness operations.
Duane Reade is led by Chairman and Chief Executive Officer Jon Lederer, the former Loblaw executive, who has embarked on a major campaign to make over the banner with a sleek new look, a new loyalty program and a new private-label food line.
The acquisition includes all 257 Duane Reade locations, most of which are in New York City, plus two distribution centers and the headquarters. Walgreen said it it would decide over time how to "harmonize" the operations of the two chains.
Walgreens currently has 70 stores in the New York metropolitan area, including 13 in Manhattan.
"One thing we've learned is that it would take many years of organic growth to reach the store count that this acquisition brings us," said Gregory D. Wasson, president and CEO, Walgreen, in a conference call with analysts Wednesday morning.
Duane Reade, which is privately owned by Oak Hill Capital Partners, had 2009 sales of about $1.8 billion, Walgreen said.
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