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DEERFIELD, Ill. -- Walgreen Co., the nation's largest drugstore chain in sales, reached a definitive agreement to acquire New York City-based Duane Reade from affiliates of Oak Hill Capital Partners for $1.075 billion cash, including the assumption of debt.
The acquisition increases Walgreen's store count in the New York metropolitan area from roughly 70 stores to 257, and adds approximately $1.8 billion to the Chicago-area retailer's annual revenues.
"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.," said Walgreens President and CEO Greg Wasson. "In addition, Duane Reade's recent initiatives in urban retailing, customer loyalty and private brand products support and accelerate Walgreens strategy to enhance the customer experience in our network of more than 7,100 stores across the country."
Oak Hill is a private equity firm with interests in dozens of companies, including TravelCenters of America and The Container Store in the retail space.
Duane Reade, which opened in New York City in 1960, will continue to operate under its brand name after the sale, which is expected to close in Walgreen's current fiscal year ending Aug. 31. Over time, consolidation of core functions at the companies' corporate offices will occur and decisions will be made on how best to "harmonize" the Walgreens and Duane Reade brands, the company stated.
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