CVS Buying Aetna for $69 Billion; Promises to ‘Remake’ Consumer Healthcare Experience

Dayton Daily News (Ohio)

December 5, 2017

Edward C. Baig

CVS shareholders will assume Aetna’s debt in a deal announced Sunday.

CVS Health is buying Aetna for $69 billion in cash and stock. The long-awaited deal was made official Sunday evening.

Aetna stockholders are to receive around $207 a share—$145 in cash and $62 in stock—and will own about 22% of the combined company. CVS shareholders will own the remainder. Including the assumption of Aetna’s debt, the total value of the transaction climbs to $77 billion.

CVS Health President and CEO Larry Merlo said in a statement: “This combination brings together the expertise of two great companies to remake the consumer healthcare experience. With the analytics of Aetna and CVS Health’s human touch, we will create a healthcare platform built around individuals. We look forward to working with the talented people at Aetna to position the combined company as America’s front door to quality healthcare, integrating more closely the work of doctors, pharmacists, other healthcare professionals and health benefits companies to create a platform that is easier to use and less expensive for consumers.”

The deal could result in lower costs to both CVS and Aetna, with the size of any savings passed along to consumers remaining to be seen.

If CVS-Aetna is approved, the deal could ignite additional mergers in healthcare. Amazon is poised to enter the drug business in some fashion, leading to further disruption and uncertainty in the industry.

What does the CVS-Aetna pairing mean for consumers? A key component of CVS’s business is its CVS Caremark, its pharmacy benefit management (PBM) subsidiary. In a climate of both rising healthcare costs and rancorous partisan divisions over the Affordable Care Act, the combination may produce greater savings for the companies as opposed to individuals.

Joseph Agnese, of investment research firm CFRA, has said that Aetna participants are likely to benefit the most because CVS may be able to offer them lower co-pays if they shop with them.

Original headline: CVS buying Aetna for $69B in cash and stock

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