BRIEF—CVS Health to acquire Aetna in biggest deal this year

In the biggest M&A deal announced this year, CVS Health, America’s biggest drugstore chain, has confirmed that it plans to acquire Aetna, one of the USA's leading diversified healthcare benefits companies.

Under the terms of the merger agreement, which has been unanimously approved today by the boards of directors of each company, Aetna shareholders will receive $145.00 per share in cash and 0.8378 CVS Health shares for each Aetna share. The transaction values Aetna at around $207 per share or about $69 billion. Including the assumption of Aetna's debt, the total value of the transaction is $77 billion.

This transaction fills an unmet need in the current healthcare system and presents a unique opportunity to redefine access to high-quality care in lower cost, local settings whether in the community, at home, or through digital tools, says CVS Health.

The transaction will position the combined company as America's front door to quality healthcare, integrating more closely the work of doctors, pharmacists, other healthcare professionals and health benefits companies to create a platform that is easier to use and less expensive for consumers, said CVS Health president chief executive Larry Merlo.

Analysts speculate that Humana, Anthem and Cigna are likely to explore mergers with large retailers as they seek to fight rising drug prices and ballooning costs related to the Affordable Care Act. However, there could be problems in that US the US Justice Department has blocked previous healthcare mega-mergers on competition grounds.