CVS to buy Target pharmacies for $1.9B

Target Corp. said Monday it has agreed to sell its pharmacy business to CVS Health, which would rebrand and operate Target’s 1,660 in-store pharmacies under the CVS/pharmacy banner.

CVS, Woonsocket, R.I., will pay Target approximately $1.9 billion for the pharmacies and 80 in-store clinics to be rebranded under CVS’s MinuteClinic banner. CVS said it expected to offer comparable positions to the 14,000 current Target health care workers.

The companies in a joint release described the deal as a “strategic relationship” including intentions to jointly “evaluate and select locations best-suited for new small format Target stores with a CVS/pharmacy inside.”

Minneapolis-based Target said it expected to realize $1.2 billion in proceeds which it would “deploy in support of its long-standing capital priorities," including share repurchase.

"At Target, we've talked a lot about the evolving preferences of our guests and this partnership demonstrates that we're committed to putting them at the forefront of everything we do," Brian Cornell, Target’s chairman and CEO, said in a statement. "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."

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The companies said they were uncertain when the deal would close but assumed late this year. In-store changes will be rolled out over a period of several months thereafter, as CVS Health and Target work to ensure the smoothest possible transition for all pharmacy and clinic patients. Target said it would “further evaluate the business impact and related support needs at its headquarters locations,” following the closing.