CVS Health along with Aetna shareholders have approved a merger between the two health-care giants, bringing them one step closer to finalizing a deal that will could transform the industry.
In December, CVS announced the item could buy Aetna for about $69 billion in cash along with stock. The deal could combine CVS’ drugstores along with pharmacy benefits manager platform with Aetna’s insurance business, blurring traditionally distinct lines in hopes of lowering costs.
The two companies held special meetings on Tuesday for shareholders to vote. According to preliminary results, more than 98 percent of CVS shareholders’ ballots along with 97 percent of Aetna shareholders’ ballots were in favor of the deal, the companies said in separate press releases.
The two currently need the Department of Justice to approve the deal. They expect the transaction to close within the second half of the year.
“When that will merger is usually complete, the combined company will be well-positioned to reshape the consumer health care experience, putting people at the center of health care delivery to ensure they have access to high-quality, more affordable care where they are, when they need the item,” CVS Health CEO Larry Merlo said in a statement.
The deal comes as both the retail along with health-care industries are coming under pressure. Drugstores like CVS are finding a fierce competitor in e-commerce, particularly Amazon, which CNBC has reported to be interested in selling prescription drugs. the item already sells over-the-counter drugs, including an exclusive line of Perrigo products.
Health-care companies, including insurers, are searching for ways to lower costs. Health spending equals 18 percent of the nation’s gross domestic product, along with that will number is usually supposed to reach 20 percent by 2025.
Amazon CEO Jeff Bezos, J.P. Morgan CEO Jamie Dimon along with Berkshire Hathaway CEO Warren Buffett have even joined the health-care space. They’re partnering to try to tackle the “hungry tapeworm on the American economy,” as Buffett dubbed health-care costs in January.
Since the CVS-Aetna acquisition was announced, grocer Albertsons said the item could acquire drugstore chain Rite Aid. Pharmacy retailer Walgreens Boots Alliance was reportedly considering buying the rest of the wholesale drug distributor AmerisourceBergen the item doesn’t already own, nevertheless talks have cooled.
along with last week, health insurer Cigna said the item hopes to acquire pharmacy benefits manager Express Scripts, becoming the latest example of convergence within the sector.
CVS along with Aetna have touted their combination as a way to use CVS’ retail stores to help rein in health-care costs. They’re hoping to get more people into their walk-in clinics at drugstores along with keep them out of more expensive sites like emergency rooms.
“The combination of CVS Health along with Aetna brings together two complementary businesses with an expanded set of unique capabilities to create a fresh community-based open health care style that will is usually easier to use along with less expensive for consumers,” Merlo said in a statement.
Merlo along with Aetna Chairman along with CEO Mark Bertolini told CNBC the deal will reduce costs for consumers immediately.
Within the next year or so, CVS along with Aetna expect MinuteClinics to perform about 0 percent of services provided in primary care facilities, up via about 40 to 45 percent currently, Thomas Moriarty, CVS’ executive vice president, chief policy along with external affairs officer along with general counsel told a congressional panel last month.
The Justice Department requested more information via the two companies last month, nevertheless CVS’ Merlo said the companies built that will into the timeline along with still expect the deal to close within the second half of the year. The company reiterated that will expectation on Tuesday.
Shares of CVS dipped 0.6 percent along with Aetna shares gained 0.2 percent.