"For those of you who don't know me, I am Milton Elsberg, and for a few more minutes I'm president and chief executive officer of Drug Fair."

He was president for seven more minutes to be exact. Then the stockholders of the 43-year-old drug store chain voted along with Elsberg to merge with Gray Drug Stores Inc. of Cleveland. It was the last stockholders meeting of Drug Fair, which Elsberg started as a pharmacist. And like a father leaving his son, Elsberg was overcome with emotion.

"I think I could cry and maybe I am," Elsberg said after 80 percent of the company's outstanding stock voted in favor of the merger. "I know how you ladies feel. You nurture a baby, it grows up. . . . I've had worries and some problems and many years of happiness. I hope the new adoptive parents will take care of my baby." Elsberg held his head in his hands and cried.

Last January, Gray and Drug Fair announced that Gray had offered to pay $20 share for the Alexandria retail chain's stock, more than twice as much as the $9 or so at which the stock had been trading. At that price the acquisition cost Gray about $34 million.

The 175-store Drug Fair chain will be a wholly owned subsidiary of Gray. Combined, the two chains will operate 355 retail drug outlets in Ohio, Florida, Maryland, Virginia, Delaware, New York, West Virginia, Pennsylvania, the District of Columbia and Kentucky. Drug Fair is second to Peoples in drug stores sales in the Washington area.

Drug Fair recently has had to contend with losses related to a chain of retail clothing stores that it divested in March 1980, sharp competition and depressed economic conditions. Gray has said it will get rid of its Rink's discount stores in an effort to reduce losses.

Gray so far has concentrated in Florida and Ohio and decided to purchase Drug Fair "just to expand into the south to become a much more major chain in the drug business," said James D. McClimans, executive vice president of Gray. "Drug Fair is in the part of the country's market that's very attractive to us."

The Drug Fair name will remain on the stores here, and the chain will become a wholly owned subsidiary of Gray's. Any changes or expansions will be announced later, McClimans said.

Why did Drug Fair agree to sell? "Because we felt the combination of the two companies would be best for the company," Elsberg said in an interview following the emotional meeting. "The only reason I was upset is I started this baby. We're not breaking up this family, just spreading out."

"Today, big is good," Elsberg continued, as he noticed a Drug Fair commercial playing on the radio. He said consumers shouldn't notice any difference in the stores, at least not immediately. He said an expansion program is planned, but he did not elaborate on it.

Most of the chain's employes will stay on with the company, Elsberg said. Elsberg and Myron D. Gerber, Drug Fair chairman, will remain with the parent company as advisers.

Last year Drug Fair had sales of $266.5 million and profits of $754,362 (45 cents a share). Sales for Gray's drug store division were $190.7 million. Total sales for Gray, including its discount department stores, were $452.7 million and profits were $4.7 million ($1.81).