Reuters has details on the move, which will prove to be an interesting combination of two healthcare giants — assuming regulators approve the deal:
This year’s largest corporate acquisition will combine one of the nation’s largest pharmacy benefits managers (PBMs) and pharmacy operators with one of its oldest health insurers, whose national business ranges from employer healthcare to government plans.
The deal comes after Aetna’s $37 billion plan to acquire smaller U.S. health insurance peer Humana Inc (HUM.N) was blocked in January by a U.S. federal judge over antitrust concerns. A proposed combination of peers Anthem Inc (ANTM.N) and Cigna Corp (CI.N) was also shot down.
In pursuant to the deal, Aetna shareholders will get $207 per share, with $145 per share in cash and 0.8378 CVS shares for each Aetna share they own. All in all, Aetna shareholders will own about 22% of the combined firm, while CVS shareholders will own the remaining 78%.
The move comes amid speculation that Amazon will soon make a big push into the healthcare space, possibly into prescription drugs. In turn, CVS is looking to rapidly expand its MinuteClinic offerings. “When you walk into CVS there’s the pharmacy. What if there’s a vision and audiology center, and perhaps a nutritionist, and some sort of care manager?” CVS CEO Larry Merlo said in a recent interview.
Aetna Inc shares rose $4.66 (+2.57%) in premarket trading Monday. Year-to-date, Aetna Inc. (AET - Get Rating) has gained 48.03%, versus a 20.00% rise in the benchmark S&P 500 index during the same period.