Just recently, CVS started discussing purchasing Aetna Inc. for over $66 billion. CVS is quickly attempting to strengthen itself amid increased competition from Amazon.com.
CVS has made a proposal to buy the health insurer for more than $200 per share, people familiar with the matter said. The talks may not lead to a deal, but in a sign of their seriousness, the companies’ respective chief executives— Larry Merlo at CVS and Mark Bertolini at Aetna—have met multiple times over a period of roughly six months, one of the people said.
Not only would Aetna's acquisition boost the number of members CVS has, but it would also advance CVS' efforts to further establish themselves in the healthcare industry. Additionally, talks of Amazon entering the pharmacy business has sped up CVS' plans.
Walgreen's recently blocked acquisition of Rite Aid Corp. has also signaled to CVS that the solution to intensifying competition is nontraditional.
In buying Aetna, CVS would evolve more in the direction of UnitedHealth Group Inc., the parent of both the biggest U.S. health insurer and a health-services arm known as Optum, which includes a PBM and a growing number of clinics and physician practices.
Personally, I don't really see this acquisition providing many benefits to CVS. Also, I don’t really see this going through on anti-trust grounds. What do you guys think? Would this be a smart move by CVS? Do you think this acquisition will be allowed?
Personally, I think this acquisition will be allowed to go through as CVS and Aetna are not 'directly' in the same business though in same industry but how long CVS will be able to stay lively in the business against the race with Amazon is different equation altogther.
Amazon has a history of disrupting businesses where it has entered, be it retail or cloud services or books. It certainly leaves others wondering, what do we next?
CVS Health to Acquire Aetna (Originally Posted: 12/05/2017)
$CVS has agreed to acquire $AET for appox. $207 per share or approx. $69Bil. Including the assumption of $AET debt, the total value of the deal is $77Bil. The transaction is expected to close in the second half of 2018. http://alph.st/bf21af3f</a">http://alph.st/bf21af3f
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