CVS To Buy Aetna For $69 Billion

In a $69 billion deal, CVS Health is acquiring insurance and health care services provider Aetna.

CVS stated that it would acquire all outstanding shares of Aetna for a combination of cash and stock. With assumed debt included, the deal’s acquisition transaction value is $77 billion. Each company’s boards of directors unanimously approved the cash and stock merger agreement, CVS stated.

The transaction, according to CVS, will fill an unmet need in the current health care system and presents a unique opportunity to redefine access to high quality care in lower cost, local settings.

CVS characterized the acquisition as a natural evolution for the companies, both of which have sought to create a more consumer-centric health care platform. The retailer added that it has steadily moved to become an integrated health care company, while Aetna has evolved beyond a traditional insurance orientation to reposition itself as a consumer well-being operation.

The merged organization, CVS asserted, will enjoy an enhanced competitive positioning that can deliver $750 million in near-term synergies, with the potential to deliver significant incremental value over the long term. In addition, it has the potential to generate new growth opportunities.

Under terms of the deal, three Aetna directors, including Aetna chairman and CEO Mark Bertolini, will join the CVS Health board of directors at closing. Aetna will operate as stand-alone business unit of CVS Health led by members of the current management team.

Larry Merlo, CVS Health president and CEO, said, “This combination brings together the expertise of two great companies to remake the consumer health care experience. With the analytics of Aetna and CVS Health’s human touch, we will create a health care 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 health care, integrating more closely the work of doctors, pharmacists, other health care professionals and health benefits companies to create a platform that is easier to use and less expensive for consumers.”

The transaction is expected to close in the second half of 2018. It is subject to approval by CVS Health and Aetna shareholders, regulatory approvals and other customary closing conditions.