Clearing the antitrust inquiry puts CVS and Jean Coutu on course for closing the deal in July.
By MARK ALBRIGHT
Published June 2, 2004
Federal antitrust regulators have signed off on the $4.53-billion sale of Eckerd Corp., the nation's fourth largest drugstore chain, to CVS Corp. and Jean Coutu Group.
With the Federal Trade Commission review of the deal complete, J.C. Penney Co. officials said they are on track for a July closing. That's about a month later than some participants had earlier projected.
While the FTC has forced some drugstore chains to shed parts of competitors they were acquiring in recent years, the agency this time required no change in the plan to split up Eckerd.
Penney is selling Eckerd to concentrate on the revival of its department store business.
CVS is paying $2.15-billion to acquire the Largo drugstore chain's mail order pharmacy and more than 1,200 Eckerd stores in Florida, Texas and Louisiana. Those stores will be switched to operate under the CVS name. CVS expects to close about 225 of the 1,200 Eckerds that are too close to its own stores or are beyond hope of a turnaround.
Coutu, a Canadian drugstore chain, is paying $2.38-billion for the Eckerd headquarters operation in Largo and more than 1,500 stores in 13 Northeast and Mid-Atlantic states.
Coutu operates under the Brooks Pharmacy banner in New England but plans to keep using the Eckerd name after merging the Largo headquarters staff with Brooks' U.S. corporate nerve center in Rhode Island.
Over the weekend, J.C. Penney closed nine Eckerd stores in Colorado, costing about 60 people their jobs. Neither Coutu nor CVS had wanted those stores, as well as a handful of new stores in various stages of development in New Mexico.
"We closed them because we don't intend to remain in the drugstore business," said Tim Lyons, J.C. Penney spokesman.
