Walgreen completes deal for Duane Reade stores

Deerfield, Ill. Walgreen Co. said Friday it has officially completed its $623 million buyout of the Duane Reade chain, thereby becoming the largest drug store operator in New York City.

The acquisition gives Walgreen 258 additional stores in the metropolitan area, along with two distribution centers and Duane Reade's headquarters. Duane Reade has more metro New York City locations than any other drug store chain. Walgreen is the largest U.S. chain, but with 70 stores in the area, it had been the third-largest player in the nation's biggest market.

The deal was announced in February. Walgreen said it will promptly pay back the $457 million in debt held by Duane Reade Holdings. The chain was bought in 2004 by a group including affiliates of Oak Hill Capital Partners. Duane Reade chairman and CEO John Lederer will continue to lead the business in New York.

Walgreen said it will look for ways to combine its brand with Duane Reade's, but said its current plan is to keep using the Duane Reade name on those stores.