CVS to Buy Michigan Drugstore Chain

CVS Corp. said it will buy Michigan drugstore chain Arbor Drugs Inc. for $1.48 billion in stock to overtake Walgreen Co. as the largest U.S. drug chain. Arbor would add 207 stores to CVS’ chain of 4,100 and boost 1998 CVS revenue about 7% to $15.3 billion. Walgreen, which has 2,418 stores, is the biggest drugstore operation in terms of revenue, with $13.6 billion annually. The purchase would enable CVS, based in Woonsocket, R.I., to enter the Detroit metropolitan area, the nation’s fourth-largest drugstore market. CVS aims to use Arbor’s dominant market share there to capture prescription drug contracts that cover employees of auto makers and other major Detroit companies. Arbor shares, which have climbed 12% since Feb. 3, rose 13 cents to close at $22.81 on Nasdaq. CVS shares fell 50 cents to close at $70.06 on the New York Stock Exchange.