Eckerd Finally Sold

Apr 05, 2004

By George Anderson

J.C. Penney has signed agreements with CVS and the Jean Coutu Group of Canada to sell Eckerd drugstores for $4.525 billion.

CVS will acquire 1,260 Eckerd stores and support facilities in the South with the greatest concentration in Florida and Texas. It will also pick up Eckerd’s pharmacy benefits management and mail order businesses. CVS’ share of the total purchase is reported to be $2.15 billion.

In a released statement, Tom Ryan, chairman, president and chief executive officer of CVS Corporation, said, “This acquisition is a unique opportunity and is consistent with our long-term strategy of expanding our store base in the high-growth sun-belt markets. The demographics in these states are very favorable, as they are experiencing rapid population growth, particularly among seniors, resulting in pharmaceutical utilization rates among the highest in the nation.

CVS claims the deal will make it the leading pharmacy retailer in the United States with more than 5,000 locations in 36 states and the District of Columbia. With the acquisition, CVS says it will now “fill approximately 13% of the nation’s retail prescriptions.”

For $2.375 billion, the Jean Coutu Group will purchase 1,539 Eckerd’s stores and support facilities in 13 Northeast and mid-Atlantic states. It will also acquire Eckerd’s home office as part of the deal.

Jean Coutu says the deal will make it the fourth largest pharmacy retailer in the United State. The company says it intends to continue operating the stores under the Eckerd name.

Moderator’s Comment: What are your thoughts on the
deal for J.C. Penney to sell Eckerd to CVS and the Jean Coutu Group?

We know there will be at least one winner out of this
deal — J.C. Penney. –
Anderson – Moderator

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