CVS Fitness could announce an acquisition of insurer Aetna for more than $66 billion as at as Monday, The Wall Street Journal reported Thursday.
The talks are assisted and would likely see Aetna valued at between $200 and $205 a share out and be comprised mainly of cash, the Journal reported.
The talks, like all handle discussions, could be delayed or ultimately fail, the Journal cautioned.
Aetna had a store capitalization of $59.27 billion after the report came out Thursday morning. Slices rose about 1 percent. CVS had a market capitalization of $77.2 billion as of Thursday morning, and its interests rose more than 2 percent on the report.
CVS and Aetna both declined to remark.
Woonsocket, Rhode Island-based CVS has been transforming itself into a health-care corporation for years, propelled by its acquisition of the Caremark pharmacy benefit manager stage in 2007. (A PBM typically is a third party that negotiates prescription upper benefits for a commercial health plan.)
This past quarter, CVS moulded roughly 70 percent of its sales from its PBM business — up 8.1 percent from the direction before.
An acquisition of an insurer like Aetna could give CVS multitudinous scale to bargain better prices for the prescription drugs it sells on its bars. It could fortify Aetna’s insurance business by creating the ability to sell its insured cheaper copayments, presumably only in CVS stores. Its vast retail footprint could favourable to as a cost-effective distribution center, or locations for in-store clinics.
It comes as Amazon has been foreboding to enter the drug industry in some fashion. With Amazon as a opponent, customers would have even less reason to go into CVS stores than they do now. Shoppers can now suss out cosmetic and household staples at other retailers and online, sometimes for a cut price.
Amazon recently told regulators it will use pharmacy documents it obtained from Tennessee and Indiana to sell medical devices and funds, not to sell prescriptions.
For Aetna, the deal would mark a change in scheme after its attempted tie-up with Humana was blocked by a federal court on antitrust soils. A CVS deal would be a so-called vertical integration — an acquisition down a gathering’s supply chain rather than “horizontal” — an acquisition of a honest competitor. Such deals are thought to be less threatening to antitrust controls. Still, AT&T, which is making the largest recent attempt at vertical integration with its planned $85 billion acquisition of Time Warner, has been sued by the Hinge on of Justice to stop the deal.