Target (TGT) will open its first stores in Canada in 2013, the second-largest discount retailer in the U.S. announced in a statement Thursday. The company agreed to pay $1.84 billion to acquire the leasehold interests for as many as 220 sites operated by Hudson's Bay Co.'s Zellers stores.
Target, which will have Zellers sublease the stores temporarily, intends to open between 100 and 150 stores in Canada in 2013 and 2014, the company said. It will invest more than additional $1 billion in upgrading the stores.
"This transaction provides an outstanding opportunity for us to extend our Target brand, Target stores and superior shopping experience beyond the United States for the first time in our company's history," said CEO Gregg Steinhafel in the statement.
The company, which has about 1,750 U.S. stores, will enter the Canadian market almost two decades after largest U.S. discount retailer Walmart (WMT) did so. Walmart, which started its Canadian operations when it acquired 122 Woolco Canada stores in 1994, now has about 320 stores in Canada.
Target shares were little changed at $55.42 at the close of New York Stock Exchange trading on Thursday. Walmart shares were also flat at $54.79.