Shares of drug-store chain Walgreen (WAG) are off 38 cents, or 1%, at$33.70 after the company this morning announced it will buy privately held New York City chain Duane Reade for $1.075 billion in cash, including the assumption of Duane Reade’s debt.
The transaction is a friendly one, with CEOs of both companies sounding very happy in the press release.
“Duane Reade is a compelling strategic acquisition,” said Walgreen CEO Doug Wasson, “that will immediately provide Walgreens with a leading position in the largest drugstore market in the U.S.”
Walgreen’s, which has 7,100 stores through the U.S., picks up 257 stores in New York to add to the 70 stores it already has in the city, the company said.
Duane Reade had $1.8 billion in sales in the last 12 months, Walgreens noted. The deal is expected to trim Walgreeen’s earnings in the first year after it closes but then add to earnings the year following.
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