CVS Health Buying More Than 1,660 Pharmacies From Target

CVS Health Corp. said it was spending about $1.9 billion to buy Target Corp.’s health and clinic businesses, expanding the drugstore chain’s reach as the baby boomer generation continues to age.

The Woonsocket, R.I., company is acquiring more than 1,660 pharmacies at Target stores in 47 states. CVS Health plans to continue operating the pharmacies inside Target stores and will open branded pharmacies at new Target stores offering those services.

CVS Health said the deal will extend its reach into new markets, including Seattle, Denver and Portland, Ore. The company said the acquisition will result in “significant sales and prescription volumes.”

Larry Merlo, CVS Health’s chief executive, said the deal is part of “a new era of growth with a broader health care focus and an appreciation of the rise of health care consumerism.”

“This strategic relationship with Target supports the highly complementary customer base, brand and culture that we share,” Merlo said in a statement.

As part of the deal, Target’s almost 80 clinic locations will also be rebranded as MinuteClinic, with CVS opening 20 new clinics within three years of the deal’s close. CVS Health and Target also plan on developing five to 10 smaller-format stores over a two-year period; each store will be branded as TargetExpress, with a CVS pharmacy tucked inside.

CVS Health is planning to finance the deal, which still requires regulatory approval, by taking on additional debt. The company said the timing of the deal’s close is uncertain.