CVS pushes into insurance with $69 billion Aetna bid

Associated Press

CVS will buy insurance giant Aetna in a roughly $69 billion deal that will help the drugstore chain reach deeper into customer health care and protect a key client, the companies announced late Sunday.

CVS Health Corp. will pay about $207 in cash and stock for each share of Aetna Inc., according to the person, who spoke on condition of anonymity because the deal has not been announced publicly. That represents a 29 percent premium to the price of Aetna shares on Oct. 25, the day before The Wall Street Journal first reported about the possibility of a deal.

The mammoth acquisition pairs a company that runs more than 9,700 drugstores and 1,100 walk-in clinics with an insurer covering around 22 million people. CVS Health Corp. is also one of the nation’s biggest pharmacy benefit managers, processing more than a billion prescriptions a year for insurance companies, including Aetna.

The deal’s impact on prescription drug prices is uncertain. Aetna customers could first see some changes in how their plans are managed. Over time, a bulked-up CVS may gain more negotiating leverage over prices, but it is difficult the say how much would trickle down to customers.

The deal could help feed a steady stream of customers to CVS stores, many of which now offer a growing menu of medical services in addition to the usual fare of prescriptions and cold and cough supplies.

That could help fuel a push by CVS to become more of a one-stop-shop for health care, a place where patients can get blood drawn, then see a nurse practitioner and pick up prescriptions.

“If you think about it, we actually don’t have anything like that,” Jefferies analyst Brian Tanquilut said recently.

CVS Health started adding clinics to its drugstores years ago and has been expanding the services they offer. Customers can get physicals, flu shots or treatments for sinus infections at the clinics. They also can receive cholesterol screenings or find help monitoring chronic conditions such as diabetes.