CVS gets preliminary OK from DOJ for acquisition of Aetna—with some conditions
A blockbuster deal that has the potential to transform the nation’s health care industry has been given the green light by the U.S. Department of Justice.
CVS Health announced that it has entered into an agreement with the DOJ that allows it to proceed with its proposed $69 billion acquisition of Aetna. DOJ clearance is a key milestone toward finalizing the transaction, which is also subject to state regulatory approvals, many of which have already been granted, according to CVS. The deal was also approved on the condition that Aetna sells its Medicare Part D prescription drug plan business — a move that Aetna has already announced. (WellCare Health Plans is taking over the plan.)
The acquisition is expected to close in the early part of the fourth quarter of 2018.
"DOJ clearance is an important step toward bringing together the strengths and capabilities of our two companies to improve the consumer health care experience," said CVS Health president and CEO Larry J. Merlo. "We are pleased to have reached an agreement with the DOJ that maintains the strategic benefits and value creation potential of our combination with Aetna. We are now working to complete the remaining state reviews."
The acquisition, which was announced in December 2017, would create a health care giant composed of the nation’s third-largest health insurer and a nationwide network of 9,700 CVS retail pharmacies, 1,100-plus walk-in medical clinics and a pharmacy benefits manager with nearly 90 million plan members.
"CVS Health and Aetna have the opportunity to combine capabilities in technology, data and analytics to develop new ways to engage patients in their total health and wellness,” Merlo said. “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. Together, we will help address the challenges our health care system is facing, and we'll be able to offer better care and convenience at a lower cost for patients and payors."
Following the close of the transaction, Aetna will operate as a standalone business within the CVS Health enterprise and will be led by members of its current management team.