CVS to Buy Target’s Pharmacy Business for $1.9 Billion

Target and CVS just struck a monster deal. (artzenter/Shutterstock and AlbertHerring/ Wikimedia Commons)

Attention Target shoppers: Get ready for a big change at the retailer’s in-store pharmacies.

CVS Health has agreed to acquire Target’s pharmacy and clinic businesses for $1.9 billion. That means more than 1,660 in-store pharmacies in 47 states will be rebranded as CVS/pharmacy.

It also means Target’s in-store clinics will turn into CVS’s popular MinuteClinic. Target plans to open 20 more pharmacies in the United States over the next three years. 

New Target stores will have CVS pharmacies as well. The timing of the deal’s closure is uncertain.

The retailer is also opening small TargetExpress stores that will also be equipped with CVS/pharmacies. A recent report said the company is doing some real estate shopping in Center City and University City to open as many as four TargetExpress locations in Philly.

For Target, it’s yet another step toward making wellness “a signature category,” a company statement said. The retailer is already shuffling the products on its shelves to feature fresh produce and healthy items more prominently. Adding CVS/pharmacy will “benefit Target’s long-term traffic and sales growth,” the company said.

CVS is expecting big things from the acquisition, claiming in a statement that it hopes to “generate significant sales and prescription volumes.”

The store-within-a-store model will also feature a low-cost generic drug option available to people who pay cash.

Expect more from the partnership, as a Target statement indicates that the two companies are not finished collaborating.

“We operate in a rapidly changing health care and regulatory environment,” said Larry Merlo, CVS Health President and CEO. “This requires companies like CVS Health to continually innovate, providing additional points of access, lowering costs and improving quality for both consumers and payors.”

Upon the news, Target stock rose 1.7 percent in mid-day trading and CVS stock climbed 0.42 percent.