Rite Aid Corp. agreed to buy closely held K&B Services Inc. and Harco Drug for an undisclosed price, adding stores with combined sales of about $900 million.
The purchase price was between $325 million and $340 million, sources said.
Rite Aid chairman Martin Grass said the transactions will increase its drugstores by 9 percent to about 3,963, and add about 10 cents to 15 cents a share in 1998.
Rite Aid intends to close Harco corporate headquarters in Tuscaloosa, Ala., and K&B's in New Orleans, firing about 475 employees. The cuts will save Rite Aid about $25 million in 1998.
K&B operates 186 stores in six southern states and Harco runs 146 stores in three southern states, bringing Rite Aid's store count in the region close to that of rival CVS Corp.
First Union, Signet banks merge
NEW YORK (AP) -- First Union Corp., the nation's sixth biggest banking company, today said it has agreed to buy Signet Banking Corp. for about $3.25 billion in stock in a deal solidifying its position in the mid-Atlantic region.
The combined banking company would be the largest in Virginia and the second biggest in the region that includes the nation's capital.
The companies confirmed they expect to make staff cuts but said it is too early to tell how many and in which operations.
The purchase of Richmond, Va.-based Signet would boost First Union's assets by $12 billion to $155 billion. First Union, based in Charlotte, N.C., already has offices in 12 states from Connecticut to Florida.
Payless Cashways firing 2,000
KANSAS CITY, Mo. (Bloomberg) -- Payless Cashways Inc. said it will close 29 stores and fire 2,000 people as it files to reorganize under Chapter 11 bankruptcy to reduce its debt load. The home-improvement retailer, which will operate 165 stores after the closings, said it has the support of its bank group and has received a commitment from the Canadian Imperial Bank of Commerce for $125 million in debtor-in-possession financing.
Payless also said it filed a plan of reorganization in which all of its creditors would get some money.
CIBC may buy Oppenheimer
NEW YORK (Bloomberg) -- Canadian Imperial Bank of Commerce's CIBC Wood Gundy Securities Corp. is expected to announce as early as Tuesday an agreement to buy Oppenheimer & Co. for about $500 million in cash, according to people familiar with the situation.
The Canadian bank will pay about $325 million up front for the closely held securities firm and another $175 million over three years to retain key employees, both shareholders and non-shareholders, the sources said.
Oppenheimer Chairman Stephen Robert and President Nathan Gantcher, who together own almost 40 percent of the firm, will stay on in senior positions and run the firm along with CIBC executives, said a person familiar with the matter.
Sprint buys Paranet for $425 million
WESTWOOD, Kan. (Bloomberg) -- Sprint Corp. said it agreed to buy closely held Paranet Inc. for $425 million in cash as it tries to boost its array of network services.
The Houston-based company will be renamed Sprint Paranet and operate as a subsidiary.
Sprint, which focuses on wide-area networks, said the purchase would permit it to design, build, integrate and manage the internal networks of computers, fax machines and other communications devices that fill offices, also called local-area networks.
Paranet, founded in 1991, had 1996 sales of $66 million, and said it expects sales to double in 1997.
In other business news
Two of Germany's biggest banks, known as Hypobank and Vereinsbank, plan to merge in a $10.5 billion deal that will create Europe's second-biggest financial institution. The merged bank would have assets of $414.5 billion, second only to Germany's Deutsche Bank AG with $494.9 billion.
Pacific Gas and Electric Co. has been fined $1.6 million for causing a California mountain fire by failing to trim trees and brush from its high-voltage lines. Superior Court Judge Carlos Baker also added up to $370,000 in restitution fines.
Equitable of Iowa Cos. said it has agreed to a $22 million settlement of a lawsuit alleging it misled life insurance customers. Equitable and other insurers were accused of touting life insurance as a savings plan and of churning, or replacing policies, to generate new commissions.