Transaction on track to close in early part of current quarter
WASHINGTON — The Department of Justice gave preliminary approval Wednesday for CVS Health’s acquisition of Aetna Corp., which the two companies say will remake health care.
The path to the $69 billion merger was cleared last month when Aetna agreed to sell its Medicare Part D drug plan business to WellCare Health Plans. Antitrust regulators had reservations about the overlap between CVS’ and Aetna’s Part D plans. The Justice Department made final approval of the deal conditional upon the sale by Aetna.
The divestiture “resolves competition concerns posed by this transaction and preserves competition in the sale of Medicare Part D prescription drug plans for individuals,” said assistant attorney general Makan Delrahim of the Justice Department’s Antitrust Division. It allows “for the creation of an integrated pharmacy and health benefits company that has the potential to generate benefits by improving the quality and lowering the costs of the health care services that American consumers can obtain.”
The transaction, which is also subject to state regulatory approvals, many of which have been granted, is on track to close in the early part of the current quarter.
“DOJ clearance is an important step toward bringing together the strengths and capabilities of our two companies to improve the consumer health care experience,” said CVS Health president and chief executive officer Larry Merlo. “We are pleased to have reached an agreement with the DOJ that maintains the strategic benefits and value creation potential of our combination with Aetna. We are now working to complete the remaining state reviews.”
“CVS Health and Aetna have the opportunity to combine capabilities in technology, data and analytics to develop new ways to engage patients in their total health and wellness,” he added. “Our focus will be at the local and community level, taking advantage of our thousands of locations and touchpoints throughout the country to intervene with consumers to help predict and prevent potential health problems before they occur. Together, we will help address the challenges our health care system is facing, and we’ll be able to offer better care and convenience at a lower cost for patients and payors.”
Following the close of the deal, Aetna will operate as a standalone business within CVS Health led by members of its current management team.