Report: Rite Aid to buy Eckerd, Brooks drug stores
Just the other day, I talked somewhat about the pharmaceutical retail industry in New Jersey. In a word, it’s crowded. Like I said the other day, before I even take a look at the local, Mom & Pop pharmacies, I’ve got a CVS, two Eckerds, Drug Fair, Rite Aid, Walgreens, and a Target Pharmacy. Add in the local pharmacies and a couple of supermarkets, it’s a crowded enviroment. A crowded enviroment which is now about to get smaller as reports are that Rite Aid is in discussions to buy Eckerd & Brooks drug stores.
Under terms being discussed, Rite Aid would pay about $1.5 billion in cash, with the rest in stock, The Wall Street Journal reported on its Web site Wednesday night, citing two people familiar with the matter.
The deal would add about 1,800 stores to Rite Aid’s existing 3,300 locations, making Rite Aid a stronger rival to Walgreen Co. and CVS Corp. There are currently 6,171 CVS stores and 5,401 Walgreen stores, according to the companies’ Web sites.
Brooks has about 330 locations in New England and New York.
What does this mean? It gives Rite Aid a leg up and moves itself up the food chain, allowing the retailer to compete better with Walgreens and CVS. I also don’t think this will be the last consolidation-type move within this industry. As consolidation has swept other segments of the retail industry, pharmaceutical retail is not immune and I think that some of the bigger players in the field will be buying up more regional chains over the next few years.
Sidenote - does Rite Aid have the best NYSE stock symbol, RAD, or what?
More coverage from Marketwatch.
Related: last week, Chain Store Age Blog had a funny piece about Walgreens in Lincoln, Nebraska: Walgreens Ahead, and Ahead, and Ahead.
