Drugstore giant CVS Health (CVS) on Sunday agreed to buy health care benefit company Aetna (AET) in about $69 billion cash and stock deal. Including the assumption of Aetna’s debt, the total value is $77 billion. The proposed merger is expected to shake up the healthcare industry, which is facing potential competition from Amazon.
According to CVS, the deal will provide a uniquely integrated, community-based health care experience for its customers. The combined company will also be able to better understand patients’ health goals, guide them through the health care system, and help them achieve their best health.
Under the terms of the merger deal, Aetna shareholders will receive $145 per share in cash and 0.8378 CVS Health shares for each Aetna share. The transaction values Aetna at approximately $207 per share.
Following the deal closure, Aetna shareholders will own approximately 22% of the combined company, while CVS Health shareholders will own approximately 78%.
The deal has been unanimously approved by the boards of directors of each company. 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.
Upon the deal closure, three of Aetna’s directors, including Aetna’s Chairman and CEO Mark Bertolini, will join CVS Board. Aetna will operate as a stand-alone business unit within the CVS Health enterprise and will be led by members of their current management team.
CVS Health President and Chief Executive Officer Larry Merlo 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.”
Following the merger, CVS Pharmacy locations will include space for wellness, clinical and pharmacy services, vision, hearing, nutrition, beauty, and medical equipment, in addition to the current products and services. Further, a new health services offering available in many locations will function as a community-based health hub.
CVS will deliver a personalized health care experience by connecting Aetna’s extensive network of providers with greater consumer access. This includes more than 9,700 CVS Pharmacy locations and 1,100 MinuteClinic walk-in clinics. It also includes further extensions into the community through Omnicare’s senior pharmacy solutions,…