U.S. pharmacy chain, CVS has put forth a proposition to buy major health insurance company, Aetna. The deal, valued at $69 billion could be the largest acquisition made this year.
The proposition comes amid dense speculation over Amazon’s entry into the pharmaceutical sector. If the reports are to be believed, Amazon is looking to make some major investments in the pharma-sector.
Despite the threat of Amazon’s entry looming on the horizon, CVS believes its deal can re-shape the healthcare industry.
The planned acquisition comes at an uncertain time for America’s pharmaceutical sector. America’s pharmaceutical sector has recently been plagued by a myriad of issues including the rising medical costs for Americans and their employers not to mention the elevated cost of prescription medication.
Additionally, recent bills passed by the government could result in a severe reduction in government-funded health programs.
Commenting on the deal, CVS CEO Larry Merlo stated “This combination brings together the expertise of two great companies to remake the consumer health care experience”. CVS has agreed to pay all of Aetna’s shareholders a whopping $207 per share.
This will include a $145 settlement in cash along with a portion in the form of newly issued stock. The agreement also covers all of Aetna’s pending debt thus bringing the total value of the acquisition to $77 billion.
CVS believes its merger with Aetna, America’s third largest insurance company, could put them in a better position to help customers battling the health costs which have grown at an “unsustainable rate”.
In a statement, the company said that the merger would fulfill an “unmet need in the current healthcare system” and added that it “presents a unique opportunity to redefine access to high-quality care in lower cost, local settings”.