CVS to buy Longs in $2.9 billion deal

WOONSOCKET, R.I. CVS says it’s agreed to buy Longs Drug Stores in a deal valued at $2.9 billion. CVS says the acquisition will give it a larger foothold on the West Coast where nearly all of Longs’ stores are located.

“This transaction provides tremendous benefits to CVS Caremark by accelerating our expansion in very attractive drug store markets and strengthening our geographic reach,” said CVS chairman and ceo Tom Ryan in a statement.

Most of Longs’ 521 stores are located in California though it also has stores in Nevada, Arizona and Hawaii. Longs has been the top pharmacy retailer in Hawaii for more than 40 years but is now being challenged there by Walgreen’s, which entered the state in 2007.

In addition to gaining more than 500 stores, CVS will acquire RX America, the fast-growing prescription benefits management service owned by Longs. Founded in 1938, Longs is one of the oldest pharmacy retailers on the West Coast and generated earnings of $98.9 million in fiscal 2008.