CVS Health Corp. on Monday said it agreed to buy Target Corp.’s pharmacy and clinic businesses for about $1.9 billion in a deal that will significantly grow CVS’s retail presence.
The deal includes more than 1,660 pharmacies, which CVS will rebrand as CVS/pharmacy and operate through a store- within-a-store format. The transaction also includes nearly 80 clinics, which will be rebranded as MinuteClinic.
CVS said it expects the deal to generate significant sales and prescription volumes, while boosting its presence in new markets such as Seattle and Portland.
For its part, Target expects the move to increase its focus on wellness and drive long-term traffic. The retailer said it expects the sale to bring in $1.2 billion after taxes, which it said it could use to fund share buybacks.
After a long stretch of weak traffic and sales, Target has refocused itself on profitable categories like apparel and home goods and bringing back a sense of uniqueness to its stores.
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