CVS Health Plans Target Pharmacy Take-Over
CVS Health has plans to acquire Target’s pharmacy and clinic businesses, including two on the Big Island and a total of six in the state. According to CVS Health officials, the Hawai’i pharmacies will continue to be branded consistently as “Longs Drugs.”
The total acquisition will be completed for about $1.9 billion and will provide CVS Health with Target’s 1,660 pharmacies than span across the country in 47 states. CVS will operate the pharmacies through a store-within-a-store format that will be branded in the United States mainland as CVS/pharmacy, and in Hawai’i, the pharmacies will continue to be branded as Longs Drugs.
In addition to the acquisition of current pharmacies, CVS/pharmacy will be included in all new Target stores that plan to offer pharmacy services.
CVS/pharmacy also plans to operate Target’s 80 clinic locations, which will be rebranded as MinuteClinic. Twenty additional clinics are also planned within three years of the close of the transaction. These clinics will be part of CVS/MinuteClinic’s plan to operate 1,500 clinics by 2017.
CVS Health and Target will develop 10 small, flexible format stores in the two-year span following the deal closure that will be branded as TargetExpress. The stores will include a CVS/pharmacy.
“This strategic relationship with Target supports the highly complementary customer base, brand, and culture we share,” said Larry Merlo, CVS Health President and CEO. “When we introduced the new name for our company, CVS Health, we began a new era of growth with a broader health care focus and an appreciation of the rise of health care consumerism with consumer choice and accountability growing. This relationship with Target will provide consumers with expanded options and access to our unique health care services that lead to better health outcomes and lower overall health care costs.”
“At Target, we’ve talked a lot about the evolving preferences of our guests and this partnership demonstrates that we’re committed to putting them at the forefront of everything we do,” said Brian Cornell, Target Chairman and CEO. “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.”
CVS Health has committed to offering low-cost generic drug options for Target’s cash-paying guests.
“We operate in a rapidly changing health care and regulatory environment,” added CVS Health’s Merlo. “This requires companies like CVS Health to continually innovate, providing additional points of access, lowering costs and improving quality for both consumers and payors.”
The transition is expected to generate significant sales and prescription volumes for CVS Health, while allowing Target to continue its efforts in offering traffic-driven business in its stores and provide a different experience in support of its wellness efforts.
Although the exact transaction closing time in uncertain, CVS Health officials expect that it would close by the end of the year.
Following the closure of the acquisition, in-store changes will be made in the following several months.
CVS Health officials say they are committed to offering Target’s nearly 14,000 in-store health care professionals comparable positons with CVS Health as it transitions.