Walgreen Co. to buy online retailer drugstore.com

NEW YORK – Drugstore operator Walgreen Co. said Thursday it will spend about $429 million to buy online retailer drugstore.com in a deal that gives it access to 3 million online customers.

The largest U.S. drugstore operator will give drugstore.com shareholders $3.80 in cash for each of their shares – more than double the $1.79 closing price of drugstore.com’s stock on Wednesday. On Thursday the stock jumped $2.03 to close at $3.82.

The acquisition will add about 60,000 products to Walgreen’s online offerings, and the Deerfield, Ill., company said it will significantly speed up its online strategy. Drugstore.com is one of the largest online health and beauty retailers, and Walgreen has said those products are an important part of its strategy. Drugstore.com’s websites include Beauty.com, SkinStore .com and VisionDirect.com. Despite its name, it does not have a pharmacy business, as it sold that division in July 2010.

Drugstore.com shareholders still must approve the acquisition, but the Bellevue, Wash., company’s board has already unanimously approved it.

Walgreen said Tuesday its fiscal second-quarter earnings climbed 10 percent. The drugstore operator earned $739 million, or 80 cents per share, in the quarter that ended Feb. 28. Revenue climbed 9 percent to $18.5 billion.