Dive Brief:
- Target Corp. and CVS Health Corp. announced Monday that CVS Health will buy Target's pharmacy and clinic businesses for $1.9 billion.
- CVS Health will gain about 1,700 new locations through the deal, some in new markets like Seattle, Portland, and Denver.
- The deal, which still needs to be approved by regulators, also requires Target's pharmacies to rebrand to CVS/pharmacy and operate as stores-within-stores. Target's clinics will rebrand to CVS MinuteClinics.
Dive Insight:
CVS seems to be aggressively expanding its role as a drug distributor and healthcare resource, with its ban on tobacco sales, acquisition of drug fulfillment company Omnicare last month, and now this. The hundreds of new CVS locations will help the retailer better compete with grocers, big-box chains like Wal-Mart, and other drugstore chains as they all continue to expand their customer health offerings.
As retailers continue to make their shopping destinations one-stop shops for consumers, the deal will also help Target and CVS prepare for the consumer health boom that's predicted to happen as Baby Boomers age and millions of uninsured people become insured under the federal healthcare revamp.
