CVS Health’s subsidiary CVS Pharmacy is acquiring 110 pharmacies in the Midwest through a definitive agreement to take over Schnuck Markets’ retail and specialty pharmacy businesses.
The transaction is expected to close by the end of the second quarter of 2020. An acquisition price and other financial details were not disclosed.
Schnuck Markets, founded in St. Louis in 1939, is a family-owned grocery and pharmacy retailer operating 112 stores across Missouri, Illinois, Indiana, Wisconsin and Iowa. It is the 155th largest privately-owned company in the U.S. with 13,500 employees, according to Forbes.
The move is strategic and “capital-efficient” for CVS Health, which acquired Aetna for $69 billion in late 2018, to expand in certain markets by taking over one of the leading Midwest pharmacy providers. Under the agreement, 99 Schnucks pharmacies will be rebranded as CVS Pharmacy and the prescription files from 11 Schnucks pharmacies will transfer to nearby CVS Pharmacy locations.
The acquisition also aligns CVS Health with the Midwest grocer. Other healthcare companies have strategically teamed up with grocery chains to provide health and pharmacy services, including Walgreens, which partnered with Kroger last year in a pilot test. The pairing can help address social determinants of health, including providing healthy food to adults with chronic diseases. In addition, both CVS Health and Schnucks recently removed tobacco products from its shelves; Schnucks stores became tobacco free as of Jan. 1, 2020, according to the press release.
"We have great admiration for Schnucks and believe CVS Pharmacy can bring additional clinical services to its customers,” Jon Roberts, executive vice president and chief operating officer, CVS Health, said in a statement. “One of CVS Health's strategic imperatives is to Be Local. By opening CVS Pharmacy locations within Schnucks stores, we're increasing access to high quality care and meeting customers where they are. Schnucks is a best-in-class grocer and we're honored to partner with them to bring our best-in-class pharmacy capabilities to their customers.”
CVS will attempt to maintain pharmacist and pharmacy positions by posting the jobs and interviewing all Schnucks employees who apply, the company said. The changes will be rolled out over “a period of several months” once the acquisition is complete.
Schnucks customers will have access to all of CVS Pharmacy’s care programs, including the CVS Pharmacy app and ScriptPath Prescription Schedule.
"As Schnucks continues to expand our emphasis on health and wellness, this collaboration with CVS is an opportunity for us to align with a company that has a similar focus," Todd Schnuck, chairman and chief executive officer of Schnucks, said in a statement. "This partnership allows us to continue to provide quality pharmacy services to our customers in a manner they've come to expect, while supporting our mission to nourish people's lives. It also provides our pharmacy teammates an opportunity to further their careers with a premier retail pharmacy chain."
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."