CVS Health has announced that it has entered into a definitive agreement to acquire Target’s pharmacy and clinic business for approximately US$1.9 billion. The deal, which is subject to regulatory clearance, is expected to close at the end of the year.

Through the agreement, the US drugstore giant will operate Target’s 1,660 pharmacies through a store-within-a-store format branded as CVS/pharmacy. A CVS/pharmacy will also be included in all new Target stores that offer pharmacy services.

The retailers also plan to open five to 10 flexible format stores over the two years following the deal’s close, each branded as TargetExpress and including a CVS/pharmacy.

The deal expands CVS’ retail presence in the US, and adds a new retail channel for its offer, while enabling Target to strengthen its focus on wellness. “This strategic relationship with Target supports the highly complementary customer base, brand and culture we share,” said Larry Merlo, CVS Health President and CEO.