Rite Aid, Brooks-Eckerd deal complete

CAMP HILL, Pa. Rite Aid announced today that it has completed its acquisition of 1,854 Brooks and Eckerd stores and six distribution centers from The Jean Coutu Group, creating the largest drugstore chain on the East Coast.

The stores and distribution centers are located in 18 states, primarily on the East Coast and in the Mid-Atlantic region. After regulatory required divestitures of 26 stores, Rite Aid will have 5,160 stores.

Mary Sammons, Rite Aid president and ceo, has also been appointed chairman of the Rite Aid board of directors, succeeding Robert Miller who remains a director. Michel Coutu, formerly president of The Jean Coutu Group's U.S. operations, has been appointed Rite Aid non-executive co-chairman.

Starting immediately, Rite Aid will fully convert 23 Brooks and Eckerd pilot stores, which represent various store layouts, and integrate six new distribution centers. All stores are expected to be converted and re-branded Rite Aid over the next 16 months.

According to Rite Aid, the company plans to invest more than $1 billion over the next several years to upgrade the stores and distribution centers.

On August 24, 2006, Rite Aid and The Jean Coutu Group announced that they had reached a definitive agreement for Rite Aid to purchase the Brooks and Eckerd drugstore chains. Rite Aid shareholders approved the acquisition at a special stockholders meeting on January 18.

The Jean Coutu Group received $2.36 billion in cash, subject to a working capital adjustment, and 250 million shares of Rite Aid common stock in the transaction, giving it an approximate 32% common equity interest and approximately 30% of the voting power in Rite Aid.