CVS Health Corporation and Target Corporation announced a surprising deal Monday morning. CVS has acquired Target’s pharmacy business for $1.9 billion.
CVS Health will run Target’s 1,600 pharmacies within stores nationwide as a “store-within-a-store,” similar to the Starbucks coffee locations in Target stores. Each pharmacy will be rebranded as a CVS/pharmacy location. In addition, all future Target stores with pharmacies will have a CVS/pharmacy.
Target also has around 80 locations with clinics and these will be rebranded as MinuteClinic locations. CVS Health will add 20 new clinics over the next three years after the deal is completed. CVS Health is hoping to operate 1,500 CVS/minuteclinic locations by 2017.
Lastly, Target and CVS Health will begin to open five to 10 small TargetExpress stores, which will include a CVS/Pharmacy.
“This strategic relationship with Target supports the highly complementary customer base, brand and culture we share,” Larry Merlo, CVS Health President and CEO, said in a statement. “When we introduced the new name for our company, CVS Health, we began a new era of growth with a broader health care focus and an appreciation of the rise of health care consumerism with consumer choice and accountability growing.”
Target CEO Brian Cornell added, “By partnering with CVS Health, we will offer our guests industry leading health care services, and at the same time, sharpen our focus on elevating the way we deliver wellness products and experiences to our guests.”
CVS Health plans on financing the deal by taking on additional debt. They hope to have the deal done by the end of the year.
image from CVSHealth.com