Walgreen buying New York-area drugstore operator Duane Reade, would add 257 stores in NYC area

Walgreen buying drugstore operator Duane Reade

DEERFIELD, Ill. — Walgreen is buying drugstore operator Duane Reade Holdings in a move to expand operations in the New York City metropolitan area.

Walgreen Co. says the deal is worth about $1.075 billion but that includes an undisclosed amount of debt.

The deal would include all 257 Duane Reade stores in the New York City metropolitan area, along with the corporate office and two distribution centers. Walgreen, one of the nation’s biggest drugstore operators, already has 70 stores in the same area.

Walgreen says it will fund the buyout with existing cash and expects the deal to close by Aug. 31.

The deal is expected to cut into Walgreen earnings per share through the next 12 months, but will cut costs between $120 million and $130 million by the third year.