Market News

Jean Coutu Group To Sell U.S. Drugstores

Longueuil, Que.-based Jean Coutu Group Inc. will sell its United States drugstore chains Eckerd and Brooks to Rite Aid Corp national drugstore group for US$1.45 billion in cash, stock and $850 assumed debt. As a result of the transaction, Jean Coutu Group will have a 32% stake in the U.S. chain, making it the biggest stockholder. Two years ago the Quebec company paid about US$2.4 billion for 1,549 Eckerd stores and has faced challenges in integrating them. The company now has 1,521 Eckerd stores, 337 Brooks stores, in addition to six distribution centres, mainly on the East Coast. "We see this transaction as a unique strategic opportunity to optimize our U.S. presence by transforming our investment in a regional drugstore chain into the leading ownership position in a major national chain with the scale to better compete in the growing U.S. drugstore industry," said Jean Coutu, chairman and CEO of Jean Coutu Group. Source: Canadian Grocer E-Newsletter, August 25, 2006.