Retail Giant Target Sells Pharmacies to CVS

CVS partners with Target article at Sintel SystemsMonday investors were thrilled to learn  CVS health will buy Target pharmacies for $1.9 Billion.

Mad Money host, Jim Cramer, commented on how ideal the sale was for both companies.

Not only is there a large number number of baby boomers in need of health care, health insurance has become more widespread. The healthcare industry is a thriving.

Cramer spoke to both CVS Health CEO Larry Merlo and Target CEO Brian Cornell and believes both companies will ultimately reap the benefits of the merger.

CVS will acquire approximately 1,700 pharmacies and 80 clinics, which will be rebranded. Essentially it will be a store within a store. CVS Health will enter previously untouched markets, like Seattle and Salt Lake City.

In 2014, CVS announced it will no longer sell Tobacco products. With additional locations they will continue to promote their broader health focus.

Besides the one time costs, CVS shareholders should expect to reap the benefits by 2018.

Target had no real strongholds in the healthcare industry, thus selling is a nice bonus and will help increase margins. Cornell hopes it will bring scale and capabilities to the retailer.

Some investors question if this could mean “mallization” for the retail giant. Does it suggest Target will work to partner with other corporations?

As for the retail industry as a whole companies across the globe are predicted to seek acquisitions and mergers in the ensuing months.

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