8-KMaterial Agreements

TARGET CORP 8-K Report, Material Agreement (Jun 15, 2015)

Filed June 15, 2015For Securities:TGT

Summary

Target Corporation (TGT) announced a significant strategic move through an 8-K filing on June 15, 2015, detailing the sale of its pharmacy and clinic businesses to CVS Pharmacy, Inc. for $1.887 billion in cash. This divestiture represents a substantial reshaping of Target's in-store offerings and a move to streamline its operations by focusing on its core retail strengths. The agreement includes a long-term partnership where CVS will operate pharmacies and clinics within Target stores. This partnership grants CVS exclusive rights to these services within Target locations, while also imposing certain restrictions on CVS regarding its presence in competing retail environments. The transaction is subject to regulatory approval and customary closing conditions, with an anticipated closing date around September 2015, and a final outside date of March 2016. This deal allows Target to unlock significant capital while ensuring a continued presence of essential health services for its customers through a specialized partner.

Key Highlights

  • 1Target Corporation entered into an Asset Purchase Agreement with CVS Pharmacy, Inc. to sell its pharmacy and clinic businesses.
  • 2The sale price is $1.887 billion in cash, subject to customary adjustments.
  • 3The agreement includes a long-term strategic partnership for CVS to operate pharmacies and clinics within Target stores.
  • 4CVS will have exclusive rights to operate these services in Target stores.
  • 5The transaction is subject to regulatory approval and other closing conditions.
  • 6The expected closing date is the later of regulatory approval or September 10, 2015.
  • 7The deal allows Target to monetize its pharmacy and clinic assets and focus on its core retail business.

Frequently Asked Questions

This 8-K filing announces Target Corporation's material definitive agreement to sell its pharmacy and clinic businesses to CVS Pharmacy, Inc. for $1.887 billion.

Target will receive $1.887 billion in cash from CVS, subject to certain adjustments. The deal also includes a termination fee of $150 million payable by CVS to Target if the agreement is terminated due to failure to obtain regulatory approval by the Outside Date.

CVS will operate the pharmacy and clinic businesses within Target stores under a long-term agreement. This means Target customers will still have access to these services, operated by CVS, within the familiar Target environment. CVS will have exclusive rights to operate these services in Target stores.

The closing is anticipated to occur on the later of receipt of regulatory approval or September 10, 2015. The agreement can be terminated by either party if the closing does not occur by March 15, 2016, with an extended Outside Date of September 15, 2016, under specific conditions.