Walgreens reveals plan to buy 20 stores from Puerto Rico’s Farmacias El Amal
DEERFIELD, Ill. Making good on its pledge to aggressively pursue growth by acquiring quality competitors as well as through ground-up store development, Walgreen Co. announced today it will purchase 20 drug stores in Puerto Rico from Farmacias El Amal, a family-owned chain of 61 drug stores based on the island.
The announcement comes just over a week after Walgreens chairman and chief executive Jeff Rein reiterated the company’s increasingly flexible expansion strategy. That strategy, he said at the company’s annual shareholders’ meeting Jan. 9, would include aggressively taking advantage of promising buyout opportunities among competitors.
“While organic growth continues to be Walgreens’ primary expansion vehicle, the company is taking advantage of unique opportunities that represent a solid strategic fit,” Walgreens noted in a statement today.
El Amal said it would continue operating its other 41 stores in Puerto Rico. While successfully operating a drug chain on an island that is home to nearly 4 million people is no small feat, especially when you throw into the equation fierce competitors, El Amal has focused on its close relationship with customers as a way to stay competitive. In recent decades, the chain has gained a solid reputation among consumers on the island, but has faced withering competition from Walgreens, which has operated in Puerto Rico since 1960 and already operates 73 stores there.
“This is an excellent opportunity for us to meet the pharmacy needs of more patients in Puerto Rico,” said Rein. “We have a long history on the island and a good understanding of our customers there.
“The agreement also ensures area residents will continue to have access to pharmacy services at these 20 locations,” he added. “El Amal’s customers will see the same employees in the stores and will benefit from the added pharmacy and retail services that Walgreens offers.”
Terms of the transaction were not disclosed, and it is subject to customary closing conditions. The acquisition is expected to close in the first quarter of calendar 2008.
Walgreens said it would begin converting the stores to its own format and logo as soon as the agreement is finalized.