Walgreen buys Duane Reade

Walgreen buys Duane Reade

Thursday, February 18, 2010

Walgreen Co. agreed to buy Duane Reade for about $620 million, excluding debt, giving the largest U.S. drugstore chain a dominant presence in New York City. Walgreen Chief Executive Greg Wasson said that without the acquisition, "it would have taken us many, many years, through our organic growth model, to gain that type of presence" in New York.

Walgreen, which posted $63 billion in sales across its 7,162 stores last year, will look not only to gain a sales boost from the acquisition but also to capitalize on Duane Reade's new product and marketing initiatives. A traditionally conservative company, Walgreen has posted weaker results in recent months than its largest competitor, CVS Caremark Corp., which has moved more quickly to adopt innovative ideas such as loyalty-card programs and in-store cosmetic departments.