FINANCE

Shareholders overwhelmingly approve CVS Health acquisition of Aetna

BY Marianne Wilson

A blockbuster deal that could reshape the nation’s health care industry has moved one step closer to completion.

Shareholders of CVS Health Corp. and Aetna Inc. on Tuesday voted to approve the merger between the two companies. The deal, expected to close in the second half of 2018, is subject to required regulatory approvals.

According to preliminary results, more than 98% of CVS shareholders’ ballots and 97% of Aetna shareholders’ ballots were in favor of the deal.

“When this merger is complete, the combined company will be well-positioned to reshape the consumer health care experience, putting people at the center of health care delivery to ensure they have access to high-quality, more affordable care where they are, when they need it,” stated Larry Merlo, CVS Health president and CEO. “The combination of CVS Health and Aetna brings together two complementary businesses with an expanded set of unique capabilities to create a new community-based open health care model that is easier to use and less expensive for consumers.”

In December, CVS Health agreed to acquire Aetna Corp. for approximately $69 billion. The deal would create a health care giant composed of the nation’s third-largest health insurer and a nationwide network of 9,700 retail pharmacies, 1,100-plus walk-in medical clinics and a pharmacy benefits manager with nearly 90 million plan members.

Since the deal was announced, there has been a flurry of activity in health care. In January, Amazon, Berkshire Hathaway and JPMorgan Chase announced they were forming an independent company to address health care for the U.S. employees of their respective companies with the aim of lowering costs and improving satisfaction.

Last week, Cigna said it hopes to acquire pharmacy-benefits manager Express Scripts.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Do you think retail brands should steer clear of taking a stance on social and political issues?
FINANCE

DSW to shutter a division

BY Marianne Wilson

DSW on Tuesday reported fourth-quarter revenue that missed expectations and said it is closing its Ebuys division.

DSW acquired Ebuys, an online off-price footwear and accessories company, in 2016. The retailer said that following a review of strategic alternatives for Ebuys, it decided to exit the business and liquidate its inventory and assets.

“The company expects to complete the liquidation process in early 2018 and may incur additional one-time exit charges, which will be excluded from adjusted results,” DSW stated.

DSW’s net income for the quarter fell to $11.7 million, or 15 cents a share, in the quarter ended Feb. 3, down from $30.5 million, or 38 cents a share, in the year-ago period. Excluding non-recurring items, including the impact of recent tax legislation, adjusted earnings per share came to 38 cents, topping Street estimates of 27 cents.

Revenue rose to $720.0 million from $674.6 million, falling short of analysts’ estimates of $728.2 million. Same-store sales rose 1.3%, better than expected.

DSW raised its quarterly dividend by 25% to 25 cents a share, with the new dividend payable April 6 to shareholders of record on March 23.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Do you think retail brands should steer clear of taking a stance on social and political issues?
FINANCE

Report: Toys ‘R’ Us preparing liquidation plan

BY Marianne Wilson

Toys “R” Us is reportedly getting closer to winding down U.S. operations.

The toy giant is in the process of drafting the court motion for its liquidation plan, which it could file as early as the end of day on Wednesday, CNBC reported, citing a source familiar with the situation. A liquidation is likely to result in the closing of all Toys “R” Us U.S. stores.

The retailer filed for bankruptcy in September, and went on to experience a disappointing holiday selling season, citing “operational missteps.” According to the report, Toys “R” Us has come under increased pressure and its low cash balance left it at risk of breaching the terms of its bankruptcy loan. This week, the retailer missed a payment to some of its vendors, CNBC said.

Toys “R” Us has struggled under increased competition from Amazon, Walmart, Target and others. But a big part of its problem stems from its heavy debt load, which dates back to 2005, when the retailer was purchased by private equity investors KKR, Bain Capital, and Vornado Realty Trust in a $7.5 billion buyout. Toys “R” Us has struggled to update its offerings and processes, both online and in store, and has lagged behind its competitors digitally as its debt has put a strain on its ability to invest in its business.

In February, The Wall Street Journal reported that Toys “R” Us was planning to shutter an additional 200 stores and lay off a significant portion of its corporate staff. This came after a court filing in January in which the chain said it was planning to shrink its U.S. store portfolio by as much as 20% — about 180 locations — as part of a plan to emerge from bankruptcy before the 2018 holiday season.

Toys “R” Us’ liquidation would be a big blow for the overall toy industry, as the chain makes up about 15% of U.S. toy revenue, Bloomberg reported.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Do you think retail brands should steer clear of taking a stance on social and political issues?