Target (NYSE:TGT) Invading Canada for First Time

Target Corp. (NYSE:TGT) announced today it is going to acquire leases in Canada for the first time, spending $1.84 billion on them. This will be the first time Canada has entered the Canadian market, as well as its first move outside the U.S.

How they're doing it is buying up leasehold interest in 220 sites from Canadian discounter Zellers Inc. They expect to open up from 100 to 150 stores around Canada in through 2014.

They plan on spending over $1 billion to renovate some of the properties as well.

Funding for the projects will be done through tapping their operational cash flow.

Target said they will have Zellers sublease the sites and continue to run them under the Zeller brand for now.

Expectations are returns from the Canadian stores will be very close to new stores opened in the U.S. Normally that been dilution of earnings before the stores are opened and being accretive to earnings in the first full year of being opened.

Target added that they're looking at Puerto Rico as one of their next international expansion areas.

Target was trading at $55.71, up $0.26, or 0.47 percent as of 12:05 PM EST.