A deal on how CVS Health Corp (NYSE:CVS) will acquire Aetna has been concluded. Reports have it that the US pharmacy chain will be acquiring the medical insurer at an agreed cost of about $69 billion. Talks between the two have been going on for the last six months, a period within which the CEOs of the companies — Larry Merlo of CVS and Mark Bertolini of Aetna have had to several meetings.
The new moves come at a time when insurers are under immense pressure to reduce medical costs. However, the giant drugstore is expected to redesign the nation’s healthcare industry. The transaction also presents a clear picture of a rapidly changing industry in the effort to give consumers appealing health care.
The distorting status between drugstores and health insurance
It is in the second half of 2018 that the deal between the two companies is expected to go through. The Aetna shareholders will receive $207 per share. This entails $145 per share in cash and 0.8378 CVS shares for each Aetna share.
The news brings to a closure massive speculations, which have been running for weeks. However, it exposes a misleading status of the business relationship between drugstores and health insurance. It also presents a scenario whereby the market is embracing itself for competition as employers and consumers struggle with rising medical costs.
Rumor has it that Amazon, one of the largest online shopping giant will soon join the drugstore market. This is perhaps as a result of the rapid changes in technology as well as the censuring of the rising cost of medicines by the US President Donald Trump
But the companies are looking to change the healthcare landscape
There is a huge outcry regarding the need for affordable basic health services, which people regularly use. Thus the merger is seeking to provide an opportunity, which will benefit consumers. According to Merlo, their aim is to create a new front door to health care in America. Affordable and less expensive Medical care should be accessible from any of CVS’s locations according to Bertolini.
All said and done, there is hope that the merger will play a significant role in reshaping the business of overseeing drug coverage for insurers. But even then analysts wary about the deal being blocked by federal antitrust officials. However, only time will tell.