Target is selling its pharmacy and clinic businesses to the drugstore chain CVS Health for about $1.9 billion in a deal that combines the resources of two retailers seeking to polish their reputations as health care providers.
The acquisition will allow CVS Health to reach more patients and expand its in-store MinuteClinic brand, which it has been expanding aggressively for the past several years. It also gives the nation’s second-largest drugstore chain a retail presence in new markets like Seattle, Denver, and Salt Lake City.
Target customers, in turn, will gain access to CVS Health Corp.’s pharmacy care programs that help them manage their prescriptions, find low-cost generic drugs and buy specialty medications, a rapidly growing slice of the pharmaceutical market.
The deal includes more than 1,660 pharmacies in Target stores that will be branded as CVS/pharmacy. The agreement also calls for new Target stores to include a CVS/pharmacy if they are going to offer pharmacy services.
Target Corp.’s nearly 80 clinic locations will be rebranded as MinuteClinic. CVS Health will also open up to 20 new clinics in Target stores within three years of the deal’s closing.
In addition, Woonsocket, Rhode Island-based CVS Health and Minneapolis-based Target plan to develop five to 10 smaller stores over two years. The stores will be branded as TargetExpress and include a CVS/pharmacy.