Amazon to acquire PillPack, CVS and Walgreens shares tumble

Amazon announced Thursday that it has signed an agreement to acquire online pharmacy PillPack, a 24/7 mail-order drug company.

The e-commerce giant is expanding its footprint in the lucrative healthcare industry.

“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” Jeff Wilke, Amazon CEO Worldwide Consumer, said in a statement.

Shares of CVS and Walgreens tumbled in reaction as the sector gets even more competitive in the online space. During a conference call on Thursday following the news, Walgreens Boots Alliance CEO Stefano Pessina said he's "not particularly worried" about the the acquisition. Shares of Amazon rose on the announcement.

Ticker Security Last Change Change %
CVS CVS HEALTH CORP. 71.00 +2.52 +3.67%
RAD n.a. n.a. n.a. n.a.
AMZN AMAZON.COM INC. 146.88 +2.04 +1.41%

TJ Parker, co-founder and CEO of PillPack, said that he is eager work with Amazon, as well as his own partners across the healthcare industry to make a better pharmacy experience.

“PillPack is meaningfully improving its customers’ lives, and we want to help them continue making it easy for people to save time, simplify their lives, and feel healthier. We’re excited to see what we can do together on behalf of customers over time.”

The deal follows a move by CVS to offer deliveries nationwide from its 9,800 locations, as reported by FOX Business in June. Same-day delivery was rolled out in New York City last year and will now expand to Boston, Miami, Philadelphia, San Francisco and Washington, DC.

Both companies said they have entered into a definitive merger agreement but additional terms of the deal were not disclosed. The companies expect to finalize the acquisition during the second half of the year.

Completion of this transaction is subject to regulatory approvals and other customary closing conditions.