JC Penney confirms drugstore sale
2,800 stores split between to competitors
US retail giant JC Penney has confirmed the $4.5bn sale of its Eckerd drugstore chain, as expected splitting the 2,800 stores between CVS Corporation and Jean Coutu Group.
Jean Couto, based in Canada and with around 330 stores in the north of the USA, is buying 1,540 Eckerd stores for about $2.375bn. CVS, the number two player in the US pharmacy market, is buying 1,260 stores, mostly in the South and Midwest, along with Eckerd’s mail-order business, for about $2.15bn on total. Analysts expect JC Penney to use the proceeds of the sale to reduce debt, as well as to invest in its core department store operation. By splitting the business, Penney has realised more value and avoided the possibility of a delay to the sale from the US competition authrorities. [img r]jeancoutu.jpg[/img]The deal is a major coup for Jean Coutu, more than tripling its annual sales to $11bn. CVS will also significantly expand its geographic spread, and add around $7bn in annual sales. CVS has also seen off competition from rival Rite Aid. The number three player in the market, Rite Aid had hoped to acquire the entire Eckerd business.
