Wednesday, February 17, 2010

Another Landmark Business Devoured by Corporate Titans

...proving for the umpteenth time that, when money is cheap, the big get bigger and the marketplace suffers a loss of competing interests.

From Bloomberg:

Walgreen to Buy New York’s Duane Reade Chain for $618 Million

By Chris Burritt and Carol Wolf

Feb. 17 (Bloomberg) -- Walgreen Co., the biggest U.S. drugstore chain, agreed to buy Duane Reade Holdings Inc. from affiliates of Oak Hill Capital Partners for $618 million to expand in metropolitan New York.

The cash transaction will dilute Walgreen’s profit in the first year after closing and add to earnings the following 12 months and thereafter, Deerfield, Illinois-based Walgreen said today in a statement. Walgreen will also assume $457 million in Duane Reade debt.

It's not that we think Duane Reade was such a great place. Sure it was a congenial atmosphere, but it was notoriously overpriced and its price markings weren't reliable. It's just that there's one less player on the field, and the field is that much less level now, and the elephant just got fatter, and now they can do what they wish with their prices.


Post a Comment

<< Home