CVS Caremark said on Tuesday that it will buy Longs Drug Stores for $2.9bn, including debt, in a move that continues the consolidation of the US drug store sector.

CVS Caremark will pay $71.50 in cash for each share of California-based Longs Drug, a premium of 32 per cent to the price at which Longs’ shares closed on Tuesday, which values the company’s equity at $2.6bn.