Updated from 9:13 a.m. EDTWhile analysts praised the price J.C. Penney ( JCP) got for its Eckerd drugstore chain Monday, the market anointed CVS ( CVS) the long-awaited transaction's winner. J.C. Penney announced earlier it will sell Eckerd in a two-part transaction with CVS and Canada's Jean Coutu Group that will generate about $3.5 billion in cash. The divestiture completes a longstanding goal of CEO Allen Questrom, the former Federated Department Stores ( FD) executive brought in to turn around Penney after the stock collapsed in late 1999. But while the shares have more than doubled since Questrom arrived in August 2000, they were recently trading down 43 cents, or 1.2%, to $34.40 Monday. CVS, on the other hand, was up $2.36, or 6.8%, to $37.14. The transaction calls for Jean Coutu to acquire 1,540 Eckerd drugstores and support facilities in 13 Northeast and Mid-Atlantic states for $2.375 billion, while CVS will acquire 1,260 drugstores and support facilities primarily in Florida and Texas, plus Eckerd's pharmacy benefits management and mail-order business, for $2.150 billion. J.C. Penney expects to collect about $3.5 billion in cash after closing adjustments, taxes, fees and other expenses. The company will use some of the money to buy back shares. The transaction is expected to close by the end of the second quarter. "This sale will allow J.C. Penney to focus entirely on our core department store and catalog/Internet business," J.C. Penney said in a statement. "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% of sales in 2005." The company received more money for the chain than both Citigroup analyst Deborah Weinswig and Merrill Lynch analyst Daniel Barry expected. Barry called J.C. Penney "the turnaround of the decade" and expects to see productivity gains and margin expansion at the core department store after the deal is completed.