CVS buying Aetna in deal valued at $69B

CVS Health is buying Aetna for a reported $69 billion in cash and stock, the Wall Street Journal and Reuters reported, citing unnamed people familiar with the matter.

Aetna stockholders are to receive about $207 a share — $145 in cash and $62 in stock — and will own about 22 percent of the combined company in the long-awaited deal, Reuters said. CVS shareholders will own the remainder.

The deal could result in lower costs to both CVS and Aetna, with the size of any savings passed along to consumers remaining to be seen.

If the CVS-Aetna tie-up is approved, the deal could ignite more mergers in health care. Amazon is poised to enter the drug business in some fashion, leading to further disruption and uncertainty in the industry.

What does the CVS-Aetna pairing mean for consumers? A key component of CVS’s business is CVS Caremark, its so-called pharmacy benefit management subsidiary. In a climate of both rising health care costs and partisan divisions over the Affordable Care Act, the combination could produce greater savings for the companies as opposed to individuals.

Under the deal, three Aetna directors, including Aetna Chairman and CEO Mark Bertolini, will join CVS’s board of directors, Reuters reported.

The acquisition must still receive the blessing of shareholders and regulators and could close in the second half of 2018. But there are no guarantees. The Justice Department recently sued AT&T to block its acquisition of Time Warner.