In its attempt to purchase health insurer Aetna for $69 billion, CVS Health has effectively dodged one antitrust hurdle because regulators don't see competitive problems from joining two companies that operate at different levels of the supply chain, according to Bloomberg.
Here are five things to know:
1. The transaction between CVS and Aetna, announced in December, is considered a vertical deal because it doesn't combine direct competitors.
2. The investigation by the Justice Department's antitrust division isn't concerned the deal would cause competition issues, according to Bloomberg,which cited people familiar with the Justice review. Instead, the antitrust division is focused on competition between companies in the prescription drug market.
3. On June 12, a federal judge greenlightedanother vertical deal — AT&T's takeover of Time Warner. This decision ended a lawsuit attempting to block the tie-up and sent a message that other vertical megadeals won't be blocked. As a result, CVS may have an easier path to approval.
4. The acquisition would combine the U.S. drugstore giant, which also has a pharmacy benefits management business, with the third-largest health insurer. The deal could steer Aetna's members to CVS drugstores for prescription medications. Aetna has about 22 million customers.
5. Completing the deal could require asset divestitures in businesses with overlap, including its Medicare Part D plan. By acquiring Aetna, CVS would have a 33 percent national market share of Part D plans.