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Sydnee Gatewood
Sydnee Gatewood
Articles (605) 

CVS Health to Acquire Aetna in $69 Billion Deal

Companies look to transform consumer health care

December 04, 2017 | About:

Retail pharmacy chain CVS Health Corp. (NYSE:CVS) announced Dec. 3 it is acquiring health insurance company Aetna Inc. (NYSE:AET) in a cash and stock deal valued at approximately $69 billion.

According to the terms of the agreement, Aetna shareholders will receive $145 per share in cash and 0.8378 CVS shares for each Aetna share, bringing the value to approximately $207 per share. With the addition of Aetna’s debt, the total value of the deal is $77 billion.

The company says shareholders will also benefit from enhanced competitive advantages, low- to mid-single-digit accretion and approximately $750 million in near-term synergies. The combined company will also be able to develop new products and spur growth opportunities, which will benefit consumers.

According to CVS President and CEO Larry J. Merlo, the acquisition combines the expertise of the two 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,” he said. “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.”

Aetna Chairman and CEO Mark T. Bertolini agreed, saying they will better understand “members’ health goals.”

“Aetna has a proud tradition of continually innovating to address unmet consumer needs and providing leading products and services to the marketplace,” he said.

The deal is expected to close in the second half of 2018.

Following the announcement, CVS Health’s shares were down more than 4% Monday morning while Aetna’s shares increased 0.17%.

Disclosure: I do not own any stocks mentioned.

About the author:

Sydnee Gatewood
I am an editorial assistant at GuruFocus. I have a BA in journalism and a MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneeg

Rating: 5.0/5 (4 votes)



DanaBoy - 9 months ago    Report SPAM

CVS wants to pay $77 billion to buy Aetna? Are you kidding? CVS has no business buying Aetna.

CVS doesn't seem to realize its already in a thin profit margin industry and buying Aetna is going to do nothing to increase to increase that bottom line.

The stock market is littered with the corpses of companies that have overpaid for other companies - and then found out the hard way that things don't always work out the way they would have hoped.

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