CVS to buy Aetna for $77 billion

Aetna sold for $275 per share in cash and stocks

CVS offers $275 per share for Aetna.  

VS Health (CVS) and Aetna (AET) announced the execution of a definitive merger agreement under which CVS Health will acquire all outstanding shares of Aetna for a combination of cash and stock.

Under the terms of the merger agreement, 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 or approximately $69B. Including the assumption of Aetna’s debt, the total value of the transaction is $77B.

If approved, the mega-merger would create a giant consumer health care company with a familiar presence in thousands of communities. Aetna chief executive Mark T. Bertolini described the vision in an interview as “creating a new front door for health care in America.”

CVS would provide a broad range of health services to Aetna’s 22 million medical members at its nationwide network of pharmacies and walk-in clinics, and further decrease the drug store titan’s reliance on the retail sales that have faced increasing competition.

“You can imagine a world where health care is better designed around the people who use it, which is one of the challenges we have today,” CVS chief executive Larry J. Merlo said in an interview. As part of the deal, Bertolini would join the CVS board and Aetna would be run as a standalone business unit.

The deal is likely to set off even more mergers in the health-care industry, which has been undergoing consolidation and faces potential new competition from Amazon.

It could position Aetna to be more competitive with UnitedHealth Group, the nation’s largest insurer, which has already expanded  beyond its core business into pharmacy care services, clinics and surgery care centers and health care data.

CVS closed at $75.12. AET closed at $181.31.


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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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