CVS Is Said to Be in Talks to Buy Aetna in Landmark Acquisition
- 7 years ago
CVS Is Said to Be in Talks to Buy Aetna in Landmark Acquisition
CVS Health, the giant drugstore chain that also runs walk-in clinics
and a pharmacy benefit business, is in talks to buy Aetna, one of the nation’s largest health insurance companies, according to people briefed on the talks.
A larger company — CVS and Aetna have combined annual revenues of about $240 billion — could enjoy greater
leverage in negotiations with drug companies, helping it defend itself against newcomers like Amazon.
But if consummated, the deal could be worth more than $60 billion based on Aetna’s current market value, which would make it one of the largest corporate acquisitions this year
and one of the largest in the history of the health industry.
“CVS has been positioning itself as a health care company and not a pharmacy for a long time.”
The negotiations are also taking place as the online retail giant Amazon encroaches
on the turf of well-established players — and the pharmacy business could be next.
“The intensifying battle for negotiating power and market share will lead companies to do acquisitions across traditional industry boundary
lines,” said Erik Gordon, a professor at the Ross School of Business at the University of Michigan who studies the drug industry.
CVS Health, the giant drugstore chain that also runs walk-in clinics
and a pharmacy benefit business, is in talks to buy Aetna, one of the nation’s largest health insurance companies, according to people briefed on the talks.
A larger company — CVS and Aetna have combined annual revenues of about $240 billion — could enjoy greater
leverage in negotiations with drug companies, helping it defend itself against newcomers like Amazon.
But if consummated, the deal could be worth more than $60 billion based on Aetna’s current market value, which would make it one of the largest corporate acquisitions this year
and one of the largest in the history of the health industry.
“CVS has been positioning itself as a health care company and not a pharmacy for a long time.”
The negotiations are also taking place as the online retail giant Amazon encroaches
on the turf of well-established players — and the pharmacy business could be next.
“The intensifying battle for negotiating power and market share will lead companies to do acquisitions across traditional industry boundary
lines,” said Erik Gordon, a professor at the Ross School of Business at the University of Michigan who studies the drug industry.