Under the terms of the merger agreement Aetna shareholders will receive $145.00 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 $69 billion. Including the assumption of Aetna’s debt, the total value of the transaction is $77 billion. The transaction is expected to close in the second half of 2018 and is subject to approval by shareholders of both companies and anti-trust regulatory approvals.
In a statement, CVS Health President and Chief Executive Officer Larry J. 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.”
Aetna’s CEO Mark T. 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.”
The move by CVS is seen as a pre-emptive strike to transform itself from a pharmacy company into more of an integrated healthcare company and ward off the threat of e-commerce giant Amazon (AMZN), which is rumored to be considering entering the healthcare sphere.