CVS Health to buy Target pharmacy business for $1.9bn

CVS Health unveiled plans to acquire Target Corp’s pharmacy and clinic business for about $1.9bn.

Through the agreement, CVS Health will acquire Target’s more than 1,660 pharmacies across 47 states and operate them through a store‐within‐a‐store format, branded as CVS/pharmacy.

In addition, a CVS/pharmacy will be included in all new Target stores that offer pharmacy services, the companies said on Monday.

Target’s nearly 80 clinic locations will be rebranded as MinuteClinic, and CVS Health will open up to 20 new clinics in Target stores within three years of the close of the transaction.

CVS Health President and chief executive officer Larry Merlo said: ““This strategic relationship with Target supports the highly complementary customer base, brand and culture we share.

“When we introduced the new name for our company, CVS Health, we began a new era of growth with a broader health care focus and an appreciation of the rise of health care consumerism with consumer choice and accountability growing.”

CVS said that the timing of closing the transaction is uncertain, but assuming it closes near the end of the year, the deal is expected to reduce 2016 adjusted earnings per share by 6 cents, then add 10 cents in 2017 and 12 cents in 2018 and beyond.