With the closing of the $1.9 billion deal, CVS has picked up Target’s 1,672 pharmacies across 47 states, giving it more than 9,500 prescription counters. Walgreens is now in second place with 8,173 pharmacies (the acquisition of Rite Aid Corp. would put it back on top).
The Target acquisitions will be operated through a store-within-a-store format under the CVS/pharmacy banner. In addition, a CVS/pharmacy will be included in all new Target stores that offer pharmacy services. Seventy-nine Target clinics will be rebranded as MinuteClinic, and CVS will open up to 20 new clinics in Target stores within three years.
“We look forward to helping Target guests on their path to better health through CVS Health’s leading clinical programs, such as Maintenance Choice, Pharmacy Advisor and Specialty Connect,” said CVS president and chief executive officer Larry Merlo. “In addition, with the Target acquisition we will leverage our unique integrated business model and our scale to drive incremental sales volume and operating profit for the enterprise while providing convenience and cost savings to consumers and payers.”
Target chairman and CEO Brian Cornell called the deal “an important step in driving Target’s strategic priorities forward while giving our guests easy access to industry-leading health care services.”
“With the transition now under way, Target can further accelerate our commitment to wellness as a signature category, helping guests and team members in their efforts to eat better, be more active and find natural and clean label products,” he added.
The Target pharmacies and clinics will be transitioned to CVS banners and systems within six to eight months. They will give CVS an entry into five states — Alaska, Colorado, Idaho, Oregon and South Dakota — and a solid presence in new markets including Seattle; Denver; Portland, Ore.; and Salt Lake City. The company now has pharmacies in every state but Wyoming.
The acquisition “certainly grows our presence in existing CVS markets, but it also allows us to have a presence in new states,” said CVS/pharmacy president Helena Foulkes. “The relationship is another example of how we are increasing patient access and investing in our core business to drive growth.”