CVS and Aetna $69B Deal is Completed — One of Largest Transactions in Business History
Thursday, November 29, 2018
The long-awaited final federal approval of CVS’s acquisition of insurance giant Aetna received final approval on Wednesday. CVS stock closed up 1 percent, but the overall Dow Jones was up 2.5 percent yesterday.
“Today marks the start of a new day in health care and a transformative moment for our company and our industry,” declared CVS Health President and Chief Executive Officer Larry J. Merlo. “By delivering the combined capabilities of our two leading organizations, we will transform the consumer health experience and build healthier communities through a new innovative healthcare model that is local, easier to use, less expensive and puts consumers at the center of their care.”
The deal is expected to maintain and potentially increase employment in Rhode Island. Similarly, Aetna officials have told state leaders and hometown Hartford media that they expect the deal to help grow jobs. The deal points when announced saw tens of millions in cost reductions. SEE DEAL POINT BELOW
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTFor consumers, the CVS stores will begin to be more of a healthcare destination with many offerings according to Merlo’s comments in an interview with USA Today. CVS has recently has been in the news for announcing a test membership program -- an Amazon Prime-like program -- but has also been in the headlines for a lawsuit in Florida by the state's Attorney General who claims that CVS and Walgreens had a material role in the opioid crisis.
“As the front door to quality healthcare, our combined company will have a community focus, engaging consumers with the care they need when and where they need it, will simplify a complicated system and will help people achieve better health at a lower cost. We are also leading change in health care by challenging the status quo with new technologies, business models and partnerships. In doing so, we will continue to deliver on our purpose of helping people on their path to better health,” added Merlo.
The company will “connect consumers with the powerful health resources of CVS Health in communities across the country and Aetna’s network of providers to help remove barriers to high quality care,” claims the company in the announcement.
Many argued that the deal was sparked by concerns that Amazon’s moves into the pharmacy business would ultimately be devastating for CVS.
According to the company’s announcement, “New products and services developed by the combined company will be broadly available to the health care marketplace, regardless of one’s insurer, pharmacy benefit manager (PBM) or pharmacy of choice. Additionally, CVS Health offerings, including retail pharmacy services, specialty pharmacy and long-term care, walk-in clinical services and PBM services, will continue to be fully accessible to other health plans.”
“By fully integrating Aetna's medical information and analytics with CVS Health’s pharmacy data, we can develop new ways to engage consumers in their total health and wellness through personal contacts and deeper collaboration with their primary care physicians,” Merlo said. “As a result, we expect patients will benefit from earlier interventions and better-connected care, leading to improved health outcomes and lower medical costs.”
Now that the deal is completed consumers, analysts, and stockholders will look to see of the massive merger can move quickly and help make CVS an innovator or will the company struggle to integrate to massive and distinct companies and cultures.
Related Slideshow: CVS - Aetna Deal - Key Slides from Deal, Dec, 2017
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