Lincoln's Osco stores may become CVS

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By MATT OLBERDING/Lincoln Journal Star

Osco in Lincoln

Osco has stores at 14th and Superior streets, 48th and Van Dorn streets, 56th Street and Nebraska 2 and 66th and O streets.

On the Web

www.cvs.com

www.albertsons.com

Will the nation’s largest drugstore chain be entering the Lincoln market. 

It certainly looks that way after the announcement Monday that CVS is among a group of investors that will purchase the Albertson’s supermarket chain.

CVS, of Woonsocket, R.I., announced it is purchasing about 700 stand-alone Sav-on and Osco Drugstores and a distribution center in La Habra, Calif., for $2.93 billion in cash.  It will also acquire real estate interests in the drugstores for $1 billion in cash.

Neither CVS nor Albertson’s officials could be reached for comment about what the fate of Lincoln’s four Osco stores might be.

But in a press release, CVS said it would have 6,100 stores in 42 states after the deal is complete, up 700 from the 5,400 stores it now operates in 37 states.

That suggests it intends to keep open all the stores it is acquiring, including the four Lincoln Oscos.

If the stores do stay open, they will be re-bannered as CVS, according to a news release from Albertson’s.

CVS does not currently operate in Nebraska, and Lincoln’s Osco stores are the only ones in the state, after nine in Omaha closed in 2004.

Albertson’s closed its Lincoln store in 2002 and stores in Omaha and Grand Island in 2004.

CVS is among a group of investors that is buying Albertson’s for $9.7 billion in cash and stock. The buyers are also assuming about $7.7 billion in debt.

Minneapolis-based Supervalu Inc., another of the buyers, will become the nation's second-largest grocer, behind Kroger Co., with the takeover of 1,124 stores under the Albertson's, Acme Markets, Bristol Farms, Jewel-Osco, and Shaw's Supermarkets banners.

Supervalu will pay about $6.3 billion in stock and cash and assume about $6.1 billion in Albertson's debt. Supervalu will also the acquire in-store pharmacies under the Osco and Sav-on brands.

The other purchasers, led by Cerberus Capital Management, will acquire 655 stores in Dallas/Fort Worth, California, Florida, the Rocky Mountains and the Southwest. The group plans to operate the stores under the Albertson's name.

The purchase has been approved by the boards of all the companies involved. It still must get the approval of shareholders and regulators. In its release, CVS said it expected the deal to close by mid-2006.

This report contains material from the Associated Press.

Reach Matt Olberding at 473-2647 or molberding@journalstar.com.