CVS Health inked a definitive merger agreement to acquire all outstanding shares of Aetna for roughly $69 billion in cash and stock.
Here are five things to know.
1. The deal, unanimously approved by the boards of directors of each firm Dec. 3, is one of the largest transactions this year. It values Aetna at about $207 per share, higher than previous estimates of $200 to $205 per share. When including the assumption of Aetna's debt, the transaction totals $77 billion.
2. Upon closing, Aetna's Chairman and CEO Mark Bertolini will join CVS Health's board of directors, along with two other Aetna leaders. Aetna will operate as a standalone business unit under the CVS Health umbrella, and the insurer's management team will helm the subsidiary.
3. The companies said the deal will provide localized, community-based care across CVS Health's 9,700-plus pharmacies and 1,100 clinics. Sources familiar with the deal told Reuters CVS Health plans to significantly extend health services at its pharmacies under the merger.
4. The transaction is slated to close in the second half of 2018. It is subject to regulatory approvals.
5. Rita Numerof, PhD, president of Numerof & Associates, said in an emailed statement to Becker's Hospital Review, "Having the combined market clout puts Aetna more in a position akin to UnitedHealthcare in its ability to leverage an integrated PBM in negotiating prices and establishing preferred tiers with manufacturers." She added, "With CVS's large and growing clinical services footprint, Aetna can steer patients to CVS pharmacies and clinics — in many cases avoiding the costs of higher ER or other outpatient services. The merger can make expanded CVS services in-network and others out-of-network, putting additional pressure on conventional health systems to lower the costs of their outpatient services."
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