Skip to main content

CVS reportedly near deal to buy Aetna for around $66 billion

[ad_1]


CVS Health could announce an acquisition of insurer Aetna for more than $66 billion as early as Monday, The Wall Street Journal reported Thursday.





The talks are advanced and would likely see Aetna valued at between $200 and $205 a share and be comprised mainly of cash, the Journal reported.



The talks, like all deal discussions, could be delayed or ultimately fail, the Journal cautioned.




Aetna had a market capitalization of $59.27 billion after the report came out Thursday morning. Shares rose about 1 percent. CVS had a market capitalization of $77.2 billion as of Thursday morning, and its shares rose more than 2 percent on the report.



CVS and Aetna both declined to comment.



Woonsocket, Rhode Island-based CVS has been transforming itself into a health-care business for years, propelled by its acquisition of the Caremark pharmacy benefit manager platform in 2007. (A PBM typically is a third party that negotiates prescription drug benefits for a commercial health plan.)



This past quarter, CVS generated roughly 70 percent of its sales from its PBM business — up 8.1 percent from the quarter before.



An acquisition of an insurer like Aetna could give CVS more scale to bargain better prices for the prescription drugs it sells on its counters. It could fortify Aetna's insurance business by creating the ability to offer its insured cheaper copayments, presumably only in CVS stores. Its vast retail footprint could serve as a cost-effective distribution center, or locations for in-store clinics.



It comes as Amazon has been threatening to enter the drug industry in some fashion. With Amazon as a competitor, customers would have even less reason to go into CVS stores than they do now. Shoppers can now find cosmetic and household staples at other retailers and online, sometimes for a lower price.



Amazon recently told regulators it will use pharmacy licenses it obtained from Tennessee and Indiana to sell medical devices and supplies, not to sell prescriptions.



For Aetna, the deal would mark a change in strategy after its attempted tie-up with Humana was blocked by a federal court on antitrust grounds. A CVS deal would be a so-called vertical integration — an acquisition down a company's supply chain rather than "horizontal" — an acquisition of a direct competitor. Such deals are thought to be less threatening to antitrust authorities. Still, AT&T, which is making the largest recent attempt at vertical integration with its proposed $85 billion acquisition of Time Warner, has been sued by the Department of Justice to stop the deal.





[ad_2]

Share & Written By CNBC

Comments

Post a Comment

Popular posts from this blog

Ice technicians are the secret stars of the Winter Olympics

[ad_1] The emphasis of this year's two-week-long Winter Olympic Games has been placed squarely on the Olympians themselves. After all, the stated purpose of the international competition is to bring together the world’s greatest athletes in a nail-biting competition across fifteen different winter sports. But before the curlers, skiers, and skaters even arrived in Pyeongchang, South Korea, the Olympians of the ice technician world were already a few weeks deep in a competition of their own. Mark Callan of the World Curling Federation and Markus Aschauer of the International Bobsleigh and Skeleton Federation both say they’re hoping to make the best ice the Winter Olympics have ever seen. To transform the barren concrete jungle of existing tracks and arenas into an ice- and snow-covered wonderland is an enormous undertaking. And it takes a keen understanding of the physics and chemistry that keeps frozen precipitation pristine. Curling Callan has been making and maintaining ic...
Post a Comment
Read more

With Operation Popeye, the U.S. government made weather an instrument of war

[ad_1] It was a seasonably chilly afternoon in 1974 when Senators Claiborne Pell, a Democrat from Rhode Island, and Clifford Case, a Republican from New Jersey, strode into the chambers of the Senate Committee on Foreign Relations for a classified briefing. While the meeting was labeled “top secret,” the topic at hand was rather mundane: They were there to discuss the weather. More specifically, Pell, the chairman of the now-defunct subcommittee for Oceans and International Environment, and his colleague were about to learn the true extent of a secret five-year-old cloud seeding operation meant to lengthen the monsoon season in Vietnam, destabilize the enemy, and allow the United States to win the war. Though it cycled through several names in its history, "Operation Popeye" stuck. Its stated objectives—to ensure Americans won the Vietnam War—were never realized, the revelation that the U.S. government played God with weather-altering warfare changed history. The...
Post a Comment
Read more

How to avoid the mid-movie bathroom break

[ad_1] Long movies and the urge to pee have been linked since the early days of cinema. Sixty-three years before Avengers: Endgame and its three-hour runtime, moviegoers settled in for nearly four hours of The Ten Commandments . “There will be an intermission,” director Cecil B. DeMille announced during the movie’s introduction. And audiences’ bladders were relieved. On average, movies aren’t getting longer, but they also don’t come with a predetermined bathroom break. That means when nature calls, you’ve got to either sit in growing discomfort or gamble on the best time to run to the restroom. But it doesn’t have to be this way, and for most people, setting your body to “do not disturb” is fairly simple. Go before the show The first piece of advice is also the easiest: pee before the movie starts. Generally, healthy adults urinate every 3-4 hours, so the longer a movie runs, the more urgent it becomes to reset your internal p...
Post a Comment
Read more