American retail pharmacy company, CVS Health, offered to acquire healthcare company, Aetna, for $69 billion in a deal that would see the drugstore operator become a heavyweight contender in the US healthcare industry.
The two companies announced the deal on Sunday, with CVS Health Corp. paying an estimated $207 in cash and stock for each share of Aetna Inc., as well as a 20 percent premium over Aetna’s stock price. According to CVS Health, the company will save about $750 million of cost synergies within two years of completing the deal. The merger is a no-brainer, in part because of the shifting landscape of the American health care system.
With a possible Republican tax cut, most insurers, hospitals and pharmacy companies are preparing for a world without Medicare. Congress has yet to decide on the future of the Affordable Care Act, while the price spike of prescription drugs have thrown employers and consumers into a frenzy.
By merging CVS Health with Aetna, the new company could incorporate every healthcare aspect into one service. CVS has over then thousand pharmacies and retail clinics across the US while Aetna offers health care insurance plans and related services. The drugstore operator will be able to assimilate existing Aetna customers and steer them to their chain and drug-distribution network. A merged company would be able to offer a one-stop shopping spot for health insurance and care directly to patients.
“We think of it as creating a new front door to health care in America,” said Larry J. Merlo, chief executive of CVS Health.
While the new company would establish a new means of delivering care, there are critics who believe that patients who are insured by Aetna will feel forced to get a prescription or receive care from CVS.
Mark T. Bertolini, Aetna’s chief executive, thinks this merger will allow customers easier access to medical care.
“It’s in their community. It’s in their home.” He said.” CVS has the draw. People trust their pharmacist.”
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