CVS Caremark Comments On FTC Investigation Into Anti-Trust Aspects Of Walgreens Proposal To Acquire Longs, USA

Main Category: Pharmacy / Pharmacist
Also Included In: Regulatory Affairs / Drug Approvals
Article Date: 26 Sep 2008 - 5:00 PDT

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In response to the press release issued earlier today by Longs Drug Stores Corporation (NYSE:LDG) regarding the investigation by the Federal Trade Commission into the antitrust implications of a possible acquisition of Longs by Walgreens, CVS Caremark Corporation (NYSE:CVS) issued the following statement:

"The opening of an FTC investigation into the anti-competitive aspects of Walgreens' proposed acquisition of Longs, coupled with such a burdensome request, is highly unusual at this stage since no Hart-Scott-Rodino filing has yet been made. The related information request is as extensive as a Hart-Scott-Rodino 'Second Request' and seeks information on 23 different geographic markets. The FTC's interest in this transaction is not surprising since Walgreens has the second largest number of pharmacy counters in Northern California (Longs has the most) and has announced plans to aggressively enter Hawaii (where Longs is by far the largest and strongest pharmacy operator). CVS believes this development underscores that a Walgreens transaction would entail significant antitrust-related completion risk, and, at a minimum, would entail a regulatory review lasting well into 2009. Significantly, Walgreens previously terminated negotiations with Longs over antitrust concerns and has not offered to assume that risk for Longs shareholders. In addition, Walgreens' non-binding expression of interest is subject to completion of due diligence and lacks committed financing at a highly uncertain time in the economy and the financial markets.

"In contrast, the CVS Caremark transaction has cleared all regulatory hurdles, is fully financed and is ready to close. We continue to believe that the CVS Caremark offer is a compelling, certain proposition for Longs shareholders."

About CVS Caremark

CVS Caremark is the largest provider of prescriptions in the nation. The Company fills or manages more than 1 billion prescriptions annually. Through its unmatched breadth of service offerings, CVS Caremark is transforming the delivery of health care services in the U.S. The Company is uniquely positioned to effectively manage costs and improve health care outcomes through its more than 6,300 CVS/pharmacy stores; its Caremark Pharmacy Services division (pharmacy benefit management, mail order and specialty pharmacy); its retail-based health clinic subsidiary, MinuteClinic; and its online pharmacy, CVS.com. General information about CVS Caremark is available through the Investor Relations section of the Company's Web site, at http://www.cvscaremark.com/investors, as well as through the press room section of the Company's Web site, at http://www.cvscaremark.com/investors.

Forward-looking statements

This announcement contains certain forward-looking statements. These forward-looking statements may be identified by words such as 'believes', 'expects', 'anticipates', 'projects', 'intends', 'should', 'seeks', 'estimates', 'future' or similar expressions or by discussion of, among other things, strategy, goals, plans or intentions. Various factors may cause actual results to differ materially in the future from those reflected in forward-looking statements contained in this announcement, among others: (1) macroeconomic conditions and general industry conditions such as the competitive environment for retail pharmacy and pharmacy benefit management companies; (2) regulatory and litigation matters and risks; (3) legislative developments; (4) changes in tax and other laws and the effect of changes in general economic conditions; (5) the risk that a condition to closing of the transaction may not be satisfied; and (6) other risks to consummation of the transaction.

Additional Information and Where to Find it

This announcement is for informational purposes only and does not constitute an offer to purchase or a solicitation of an offer to sell Longs' common stock. The tender offer is being made pursuant to a tender offer statement on Schedule TO (including the offer to purchase, letter of transmittal and other related tender offer materials) filed by CVS Caremark with the Securities and Exchange Commission (SEC) on August 18, 2008. Longs filed a solicitation/recommendation statement with respect to the tender offer on Schedule 14D-9 on August 18, 2008. These materials, as they may be amended from time to time, contain important information, including the terms and conditions of the offer and Longs' Board of Directors recommendation of the tender offer, that should be read carefully before any decision is made with respect to the tender offer. Investors and stockholders can obtain a free copy of these materials and other documents filed by CVS Caremark or Longs with the SEC at the website maintained by the SEC at http://www.sec.gov. The tender offer materials may also be obtained for free by contacting the information agent for the tender offer, Morrow & Co., at (203) 658-9400 or (877) 366-1576 (toll-free). The solicitation/recommendation statement and related materials may also be obtained for free by contacting (925) 979-397

CVS Caremark