CVS Health will acquire, rebrand and operate Target's pharmacies and clinics under a nearly $2 billion sale announced by the two companies Monday morning.
The Minneapolis-based retailer is selling its 1,600 clinics and pharmacies to CVS for $1.9 billion.
What this means for the in-store clinics and pharmacies:
- CVS will operate all of the current operations through a "store-within-a-store" format, the news release says. In addition, every new Target built that includes pharmacy services will have a CVS presence.
- Target's nearly 80 clinic locations will be rebranded as MinuteClinic.
- CVS will open up to 20 new clinics in Target stores within three years of the sale going through.
Fortune offered some analysis, saying Target gets a solid cash boost from the deal, while also improving its offerings in the health and wellness field – something new leadership at the retailer has emphasized. (Target’s proceeds from the sale, after tax, are expected to be about $1.2 billion, the news release says.)
For CVS, it suddenly gets hundreds of new retail locations in its quest to compete with the current drug store king – Walgreens – Fortune says.
Indeed, the deal means CVS now has a presence in some large new markets, including Seattle, Denver, Portland and Salt Lake City, the news release notes.
CVS Health President and CEO Larry Merlo called it a "strategic partnership," saying its relationship with Target will give customers more options, and access to CVS' health care services.
The new clinics will be part of CVS/MinuteClinic’s plan to operate 1,500 clinics by 2017.
Brian Cornell, chairman and CEO of Target, said the deal means Target will be able to provide customers "leading health care services," while at the same time "elevating the way we deliver wellness products and experiences to our guests.”
Once the sale is finalized (likely near the end of the year), Target customers will have access to CVS Health programs such as Pharmacy Advisor, Specialty Connect and Maintenance Choice.
CVS Health also committed to having low-cost generic drugs available for Target's cash-paying customers.