CVS/Aetna Deal Could Be Worth $66B

By Susan Rupe

Earlier this week, Aetna announced it is selling its group life and disability insurance business to The Hartford.

Now it appears that Aetna itself could be on the sales block, following a Wall Street Journal report that CVS Healthcare wants to buy the insurer for more than $200 per share, or more than $66 billion.

Representatives of both companies have not commented on the report.

CVS's move to buy Aetna would shore up the drugstore giant's position as Amazon looms as a threat to the pharmacy business. Analysts said the potential CVS/Aetna deal would help CVS incentivize Aetna's 23 million health plan participants to use the CVS/Caremark mail order prescription system and shop at the pharmacy company's retail stores.

The transaction also would eliminate any risk that CVS could lose Aetna's business, which contributed 11.2 percent of CVS' consolidated net revenues in 2016.

In addition to competition from Amazon, CVS also faces a heightened threat from rivals Walgreen's and Rite Aid. Walgreen's recently received federal approval for its bid to purchase half of Rite Aid's retail locations.

For Aetna, the CVS proposal is the latest in the insurer's attempt to expand its footprint.

Aetna in 2015 agreed to acquire rival health insurer Humana as part of a deal initially valued at $37 billion but abandoned the transaction in February amid antitrust concerns raised by the Obama administration.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.