Walgreen Buys Duane Reade Pharmacy

Walgreen is paying $1.1 billion for New York pharmacy chain Duane Reade. The New York Times has more:

Walgreen is buying the 257-store chain, which is burdened by a big debt load, from the private equity firm Oak Hill Capital Partners. The deal will be financed by Walgreen’s cash on hand and includes the assumption of debt.

“Duane Reade is a compelling strategic acquisition that will immediately provide Walgreens with a leading position in the largest drugstore market in the U.S.,” Gregory D. Wasson, Walgreen’s chief executive, said in a statement.

Duane Reade, founded in 1960 and named after the two streets in Lower Manhattan where the first store was built, generated about $1.8 billion in sales in 2009, according to Walgreen.

Under the terms of the deal, Duane Reade stores will continue to operate under their current name for now, and most of its senior management team will remain for the time being. Walgreen still expects to eventually integrate Duane Reade’s stores into its 7,162-outlet stable, which includes 70 stores in the New York City area.