WOONSOCKET, R.I., Nov. 28, 2018 /PRNewswire/ -- CVS Health (NYSE:
CVS), a company that is leading the transformation of health care,
today announced that it has completed its acquisition of Aetna
(NYSE: AET), establishing CVS Health as the nation's premier health
innovation company.
"Today marks the start of a new day in health care and a
transformative moment for our company and our industry," declared
CVS Health President and Chief Executive Officer Larry J. Merlo. "By delivering the combined
capabilities of our two leading organizations, we will transform
the consumer health experience and build healthier communities
through a new innovative health care model that is local, easier to
use, less expensive and puts consumers at the center of their
care."
Added Merlo, "As the front door to quality health care, our
combined company will have a community focus, engaging consumers
with the care they need when and where they need it, will simplify
a complicated system and will help people achieve better health at
a lower cost. We are also leading change in health care by
challenging the status quo with new technologies, business models
and partnerships. In doing so, we will continue to deliver on our
purpose of helping people on their path to better health."
The combined company will connect consumers with the powerful
health resources of CVS Health in communities across the country
and Aetna's network of providers to help remove barriers to high
quality care and build lasting relationships with consumers, making
it easier for consumers to access the information, resources and
services they need to achieve their best health.
Access is a critical component of building a simpler and more
responsive and affordable health care experience for consumers. New
products and services developed by the combined company will be
broadly available to the health care marketplace, regardless of
one's insurer, pharmacy benefit manager (PBM) or pharmacy of
choice. Additionally, CVS Health offerings, including retail
pharmacy services, specialty pharmacy and long-term care, walk-in
clinical services and PBM services, will continue to be fully
accessible to other health plans. Aetna members will also continue
to have a broad network of pharmacies, including community-based
independent pharmacies, available to fill their prescriptions. CVS
Pharmacy will continue to participate within the pharmacy networks
for other PBMs and health plans.
"By fully integrating Aetna's medical information and analytics
with CVS Health's pharmacy data, we can develop new ways to engage
consumers in their total health and wellness through personal
contacts and deeper collaboration with their primary care
physicians," Merlo said. "As a result, we expect patients will
benefit from earlier interventions and better-connected care,
leading to improved health outcomes and lower medical costs."
Coordination among physicians, other health care providers and
caregivers, and the health care professionals at CVS Health,
combined with expanded health screenings and advanced connected
devices, can help providers predict and prevent major health events
before they occur by, for example, identifying pre-diabetes
symptoms or the warning signs of a heart attack. This will be done
by remotely monitoring key health vitals or helping to ensure
patients with chronic diseases take their medications as
prescribed, which can improve patient health and avoid costly
adverse events.
"Health care delivery is changing before our eyes and we are
excited to be in the vanguard of that change. With a physical
presence in almost every community across the country, we have the
unmatched ability to meet consumers where they are and provide the
care and services they need either face-to-face or with the unique
set of virtual and physical delivery service capabilities that
extends our physical presence in real-time to meet their needs,"
said Merlo.
First Phase of New Programs and Services for Consumers
Getting Underway
CVS Health has begun to put the foundational pieces of its new
health care model in place and, in the coming months, will
introduce new programs and services designed to increase access to
care, improve health outcomes and reduce medical costs for all
consumers. In particular, these programs will target better,
more efficient management of chronic disease using the networks,
technology and the people of the combined company.
Enhanced health services in the community will include a range
of services focused on self-management for patients with chronic
conditions, expansion of services at MinuteClinic, nutritional and
behavioral counseling and benefit navigation support, as well as
assistance with durable medical equipment, digital health apps and
connected devices.
Among other activities, CVS Health will build on its successful
Project Health screening events at CVS Pharmacy and Aetna's
commitment to building healthier communities to offer new
preventive health screenings in communities that are identified as
high-risk for certain health challenges. These community-based
programs will aim to improve patients' health outcomes through
expanded preventive health screenings and support in the diagnosis,
treatment and management of chronic diseases that can be
effectively treated with prescription drugs and enhanced care
management, including high cholesterol, high blood pressure and
diabetes. CVS Health will work with local community partners to
provide patients who are diagnosed for the first time with the
follow up they need. To support these communities and newly
diagnosed patients, MinuteClinic will also be introducing newly
expanded chronic care management services.
Additionally, CVS Health is developing innovative new medical
cost reduction programs to improve medication adherence and avoid
hospital readmissions and unnecessary emergency room visits. This
will include timelier and more comprehensive medication reviews as
well as expanded services and hours at select MinuteClinic
locations to reduce inappropriate emergency room use.
Transaction and Closing Details
Under the terms of the transaction, each outstanding share of
Aetna common stock is being exchanged for $145.00 in cash and 0.8378 shares of CVS Health
common stock. CVS Health is not issuing any fractional shares
in the transaction. Instead, the total number of shares of CVS
Health common stock that each Aetna shareholder is entitled to
receive is being rounded down to the nearest whole number, and each
Aetna shareholder is entitled to receive cash for any fractional
share of CVS Health common stock that the Aetna shareholder is
otherwise entitled to receive.
The transaction values Aetna at $212 per share or approximately $70 billion. Including the assumption of Aetna's
debt, the total value of the transaction is $78 billion. The combined company's shares are
listed on the New York Stock Exchange under the ticker symbol
"CVS." The Aetna brand name will continue to be used in reference
to the health insurance products. Going forward, Aetna will operate
as a stand-alone business within the CVS Health enterprise and will
be led by members of its current management team.
As a result of the acquisition, shareholders are expected to
benefit from a number of outcomes, including enhanced competitive
positioning; the delivery of more than $750
million in synergies in 2020; and a platform from which to
accelerate growth. The roadmap for value creation over the longer
term has the potential to deliver substantial incremental value
through the development of products and services that provide the
opportunity to generate significant new growth opportunities aimed
at reducing medical costs, growing membership and enhancing
revenues.
CVS Health funded the cash portion of the acquisition through
existing cash on hand and debt financing. In anticipation of the
closing of the acquisition, in March
2018, CVS Health issued an aggregate of $40 billion of unsecured senior notes at a
favorable, weighted-average blended rate of approximately 4.19%.
The notes have maturities ranging from 2 to 30 years. Additionally,
in December 2017, CVS Health entered
into a $5 billion unsecured term loan
agreement. The term loan facility under the term loan agreement
consists of a $3 billion three-year
tranche and a $2 billion five-year
tranche. The term loan facility allows for borrowings at various
rates that are dependent, in part, on the Company's debt ratings
and require the Company to pay a weighted average quarterly
commitment fee, regardless of usage.
In connection with the acquisition, on October 10, 2018, CVS Health announced that it
had entered into an agreement with the U.S. Department of Justice
(DOJ) that allowed it to proceed with the acquisition of Aetna. As
part of the agreement reached with the DOJ, Aetna entered into an
asset purchase agreement with a subsidiary of WellCare Health
Plans, Inc. (NYSE: WCG) for the divestiture of Aetna's stand-alone
Medicare Part D prescription drug plans, which have an aggregate of
approximately 2.2 million members. The divestiture transaction is
expected to close within the next few business days. Aetna
will provide administrative services to and will retain the
financial results of the divested plans through 2019. The
acquisition of Aetna was also subject to certain state regulatory
approvals which have all now been obtained.
About CVS Health
CVS Health is the nation's premier
health innovation company helping people on their path to better
health. Whether in one of its pharmacies or through its health
services and plans, CVS Health is pioneering a bold new approach to
total health by making quality care more affordable, accessible,
simple and seamless. CVS Health is community-based and locally
focused, engaging consumers with the care they need when and where
they need it. The Company has more than 9,800 retail locations,
approximately 1,100 walk-in medical clinics, a leading pharmacy
benefits manager with approximately 93 million plan members, a
dedicated senior pharmacy care business serving more than one
million patients per year, expanding specialty pharmacy services,
and a leading stand-alone Medicare Part D prescription drug plan.
CVS Health also serves an estimated 39 million people through
traditional, voluntary and consumer-directed health insurance
products and related services, including a rapidly expanding
Medicare Advantage offering. This innovative health care model
increases access to quality care, delivers better health outcomes
and lowers overall health care costs. Find more information about
how CVS Health is shaping the future of health at
https://www.cvshealth.com.
Forward-Looking Statements
The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements made by or on behalf of CVS Health
Corporation. By their nature, all forward-looking statements
involve risks and uncertainties. Actual results may differ
materially from those contemplated by the forward-looking
statements for a number of reasons as described in our Securities
and Exchange Commission filings, including those set forth in the
Risk Factors section and under the section entitled "Cautionary
Statement Concerning Forward-Looking Statements" in our most
recently filed Annual Report on Form 10-K and Quarterly Report on
Form 10-Q.
Investor Contact:
Mike McGuire
401-770-4050
Michael.McGuire@CVSHealth.com
Media Contact:
Carolyn
Castel
Carolyn.Castel@CVSHealth.com
401-770-5717
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