Revco Bought by Rite Aid in $1.8-Billion Deal : Pharmacies: New entity would be largest U.S. drugstore chain and a leader in managed prescription benefits.

Rite Aid Corp. said Thursday that it agreed to buy Revco D.S. Inc. in a $1.8-billion cash and stock deal that will create the nation’s largest drugstore chain and a leader in the fast-growing area of managed prescription benefits.

Rite Aid Chairman Martin Grass said that although the deal will create a drugstore colossus with $11 billion in annual revenue, the main impetus for the acquisition was to compete more effectively in the managed prescription benefits arena.

Rite Aid, which would nearly double the number of its stores to 4,500 after the deal, said it expects to save $156 million a year by eliminating duplicate positions and cutting costs, but that it will post a onetime $163-million charge to cover merger costs.

Neither company has stores in Southern California.

“The combination of these two great companies will create the preeminent retail drugstore chain in the United States. This transaction will nearly double our revenues and number of stores,” Grass said in a statement announcing the deal.

Grass said in a telephone interview that the only job losses anticipated are 1,100 positions at Revco’s headquarters in Twinsburg, Ohio, which will be closed.

Revco operates about 2,100 stores in 14 Midwest, Southeast and East Coast states. It has annual sales of $4.4 billion. Rite Aid, based in Camp Hill, Pa., has 2,700 stores in 21 states, mostly in the East. It had revenue of $4.53 billion last year.