CVS further widens reach with $1.9B deal for Target's pharmacies
- CVS is acquiring Target's 1,600-plus pharmacies in 47 states for a total of $1.9 billion.
- CVS already has 7,800 stores.
- All new Target stores will include a CVS/Pharmacy.
The overall goal of this move for CVS' CEO, Larry Merlo, is to increase the company's reach and to push deeper into the healthcare space. This follows recent announcement of CVS's acquisition of Omnicare, Inc., a nursing home pharmacy chain, for $12.7 billion. In addition, it brings CVS to new key metropolitan areas, including Seattle, Denver, and Oregon.
On the Target side, the goal for CEO Brian Cornell is to re-strengthen the chain's reputation as a top-notch, value-based location for exclusive merchandise and a place where customers end up spending more than planned when they come.
Already, Target has almost 80 clinics, which will be rebranded as MinuteClinic. Although the deal will decrease CVS' earnings in the short term, by 2017, the company projects increased earnings of an additional 10 cents per share, which it expects will increase to an additional 12 cents per share in 2018, according to Bloomberg.
- Bloomberg Business CVS to pay $1.9 billion for pharmacies inside Target stores