The nation’s largest retail pharmacy, CVS, announced on Wednesday it had completed a $69 billion acquisition of health insurance giant Aetna.
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“Today marks the start of a new day in health care and a transformative moment for our company and our industry,” CVS Health president and chief executive officer Larry J. Merlo said in a statement.
Shares of both companies rose on the announcement.
|CVS||CVS HEALTH CORPORATION||71.51||-0.43||-0.60%|
Merlo said in a statement earlier this month that the deal will create new ways for the companies to engage patients' total health care needs, with added convenience and lower costs.
"Our focus will be at the local and community level, taking advantage of our thousands of locations and touchpoints throughout the country to intervene with consumers to help predict and prevent potential health problems before they occur," he said, adding that Aetna would continue to operate as a standalone company within CVS.
As part of the deal, Aetna agreed to sell all of its Medicare prescription drug plans to WellCare Health Plans.
Aetna counts 23.1 million medical members, 14.5 million dental members and 15.2 million pharmacy benefit managers as customers, according to the company’s website. CVS is a pharmacy benefit manager with more than 9,700 location and $40 billion in specialty drug revenue.
Experts believe the acquisition of Aetna would give CVS better leverage in pricing discussions, which would be particularly valuable at a time when companies are inundated with public pressure to reduce costs. It could also usher more patients into its MinuteClinics for care.
CVS expects the deal to save a potential $750 million in the second full-year after it passes, the company said in a presentation last year.