The nation's largest drugstore chain, Walgreen Co., is strengthening its position in New York City, as it announced today it has reached an agreement to acquire Duane Reade Holdings Inc.

Walgreen Co., which operates more than 7,100 stores nationwide will acquire the 257 New York City area stores of Duane Reade Holdings, Inc from affiliates of Oak Hill Capital Partners in a cash transaction with a total value of $1.075 billion, which includes the assumption of debt, the companies said.

The deal also includes Duane Reade's corporate office and two distribution centers, according to a released statement.

Walgreen will fund the purchase with its own cash and expects the deal to close by the end of August.