One of the biggest drug deals in U.S. history was reported this week. But in this case, the police did not get involved. The deal is legal and involves the acquisition of drugstore.com by Walgreens.

Walgreens and drugstore.com have entered into a merger agreement. Under the terms of the agreement, Walgreens will acquire drugstore.com in exchange for $3.80 per share of stock. The total estimated value of the transaction is $409 million.

Drugstore.com is a web-based drugstore that was founded in 1998 and was launched on the Internet in 1999. In 2010, drugstore.com's sales amounted to $456 million. Last year, drugstore.com was ranked as the eighth largest U.S. Internet-based retailer.

In the acquisition, Walgreens will acquire the drugstore.com website. In addition, Walgreens will also acquire other websites operated by drugstore.com. These include drugstore.com's well-known beauty website, Beauty.com and skin care website, SkinStore.com. Also included is the eye care website VisionDirect.com.

Walgreens is one of the largest national drugstore chains in the nation. Its 2010 sales amounted to $67 billion. Walgreens operates stores in all 50 states, the District of Columbia and Puerto Rico. It currently has a total of 7,689 retail stores. It also operates an online store.

As a result of the acquisition, Walgreens hopes become the most convenient health and living needs retailer in the U.S. through multiple venues. These venues include their retail stores and a more significant online presence. With the acquisition of drugstore.com, Walgreens expects to further expand its online business. In doing so, Walgreens hopes to expand its product selection to 60,000 new products. Walgreens also hopes to capture the online consumers that have become loyal customers of drugstore.com. The total customer base of drugstore.com is approximately three million customers.

Walgreens plans to fund the acquisition with existing cash. Completion of the merger is dependent upon shareholder approval. The merger is expected to be completed by June 2011.

Source: CSP Daily News, "Walgreens to Acquire drugstore.com," 24 Mar 2011