NEW YORK (CNN/Money) - J.C. Penney Co. announced Monday it agreed to sell its long-struggling drugstore chain Eckerd for $4.5 billion, splitting the sale of the division between CVS and Canadian drugstore chain Jean Coutu Group.

According to the details of the deal, CVS, the No. 2 drugstore chain will acquire about 1,260 stores, principally in Florida and Texas, for about $21. billion.

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The Jean Coutu Group will acquire 1,539 stores located in northeast and mid-Atlantic states, as well as the Eckerd Home Office in Florida, for $2.3 billion.

The Eckerd sale would generate about $3.5 billion in cash for Penney (JCP: Research, Estimates).

Penney said in a statement that the sale would now allow the retailer, which is trying to turn around its department stores, to focus primarily on further improving its core department store and catalog/Internet business.

"Our core business has made tremendous progress over the past three years, with significant improvement in both sales and operating profit, and we remain confident we will achieve our operating profit goal of 6 to 8 percent of sales in 2005," Penney said in a statement.

The deal also makes CVS (CVS: Research, Estimates) the largest drugstore operator in the country, ahead of No.1 chain Walgreen (WAG: Research, Estimates), in terms of total number of stores.

"Our department stores and drugstores are two totally different businesses, both in need of restructuring and a turnaround," Penney CEO Allen Questrom said in a press conference Monday. "We felt that dividing our time between the two would not make Penney competitive in the long run."

Questrom suggested that Jean Coutu Group, which runs a 330-store Brooks Pharmacy chain in the United States, would continue to keep the Eckerd name.

Jean Coutu was not immediately available for comment.

Said Ulysses Yannas, analyst with Buckman, Buckman & Reid, "The Eckerd sale is definitely good news for Penney on two fronts. They've generated substantial amount of money from the sale. Secondly, Eckerd was a continuing diversion of management's time. That also is resolved somewhat,"

"However, it's still not clear sailing yet for Penney," Yannas added. "Its department stores are facing stiff competition from specialty stores and from the discounters like Target."