CVS Will Acquire Target's Pharmacy Business For Nearly $2 Billion

CVS Health Corp CVS has signed an agreement alongside Target Corporation TGT.

CVS will acquire and rebrand Target’s pharmacies and clinics and will operate them in a different way, according to a press release filed on Monday morning. Shares of both companies are up slightly in pre-market trading.

The deal, in particular, will cost CVS $1.9 billion but will add more than 1,660 pharmacies in 47 states. CVS will operate the pharmacies “through a store-within-a-store format.”

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CVS Pharmacy will be included in Target’s new stores that offer pharmacy services.

The two companies plan to build five to 10 flexible format stores in the next two years -- the new stores will be named TargetExpress and will include CVS Pharmacy.

The transaction will allow CVS to reach out to new and potential patients, add a new retail channel, and expand its convenience. Larry Merlo, CVS Health President and CEO suggested "this strategic relationship with Target supports the highly complementary customer base, brand and culture we share."

Brian Cornell, Target’s CEO and Chairman, added, "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."