CVS Health has agreed to acquire American health insurer Aetna for $69bn in a move to address rising healthcare expenditure by providing less expensive medical services across pharmacies.
The US-based drugstore chain operator and healthcare company will also assume $8bn of Aetna’s debt.
As per the terms of the merger agreement, CVS Health will buy each of Aetna’s shares at $207. Post merger, CVS Health will own around 78% in the combined entity while Aetna will have the remaining 22% stake.
The merger of CVS Health and Aetna is expected to help meet an unmet need in the current health care system.
According to CVS Health, the merger is also expected to provide customers with better experience, lowered costs and improved access to health care experts in homes and communities alike.
CVS Health president and CEO 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.
“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.”
CVS Health further added that the merger is a natural progression for the two companies as they try to put customers at the center of health care delivery.
Aetna chairman and CEO Mark Bertolini said: “This is the next step in our journey, positioning the combined company to dramatically further empower consumers. Together with CVS Health, we will better understand our members’ health goals, guide them through the health care system and help them achieve their best health.
“Aetna has a proud tradition of continually innovating to address unmet consumer needs and providing leading products and services to the marketplace.”
Aetna will be operated by the combined company as a separate unit after completion of the merger, which is slated to be finalized in the second half of 2018.
The transaction will be subject to approvals from shareholders of both CVS Health and Aetna, apart from meeting other customary closing conditions, including regulatory approvals.
CVS Health's offer to Aetna comes about ten months after the latter had scrapped an agreement to acquire rival health insurer Humana for $37bn. This was after the merger transaction was blocked by a US federal judge on antitrust grounds.
Image: Aetna building in Hartford, Connecticut. Photo: courtesy of Sage Ross/Wikipedia.org.