CVS closes in on deal to buy health insurer Aetna: source

Business


(Reuters) – CVS Health Corp (CVS.N) is moving closer to a more than $66 billion cash and stock deal to buy health insurer Aetna Inc (AET.N) which could be announced as early as Monday, a source familiar with the matter said on Thursday.

FILE PHOTO: The CVS logo is seen at one of their stores in Manhattan, New York, U.S., August 1, 2016. REUTERS/Andrew Kelly/File Photo

Shares of both companies rose on the news, which was originally reported by the Wall Street Journal. CVS shares were up 2.7 percent and Aetna shares rose 0.7 percent in late morning trading.

The companies are in advanced stages of negotiating a deal that would value Aetna at between $200 and $205 per share and would be comprised mainly of cash, the Journal said. (on.wsj.com/2j5V1yn)

Sources told Reuters earlier this month that the deal would value the company at more than $200 per share.

The deal would combine CVS, one of the largest U.S. pharmacy benefits managers and drugstore chains, with Aetna, one of the oldest health insurers, whose far-reaching business ranges from employer healthcare to government plans nationwide.

Healthcare consolidation has been a popular route for insurers and pharmacies, under pressure from the government and large corporations to lower soaring medical costs.

Pharmacy benefit managers (PBMs) such as CVS negotiate drug benefits for health insurance plans and employers, and have in recent years taken an increasingly aggressive stance in price negotiations with drugmakers.

They often extract discounts and after-market rebates from drugmakers in exchange for including their medicines in PBM formularies with low co-payments.

A tie-up with Aetna could give CVS more leverage in its price negotiations with drug makers.

Additional reporting by Ankur Banerjee in Bengaluru; Editing by Savio D’Souza and Marguerita Choy

Our Standards:The Thomson Reuters Trust Principles.



Source link

Products You May Like

Articles You May Like

Former Texas emergency operator jailed for hanging up on thousands…
Cow may be biggest mammal if humans keep up extinctions-study
Prosecutors urge charging New York policeman in 2014 choke hold…
Police start security operation a month ahead of UK royal wedding
Plastic-eating enzyme holds promise in fighting pollution – scientists

Leave a Reply

Your email address will not be published. Required fields are marked *