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CVS Health Closes Acquisition Of Aetna

CVS Health (CVS) said that it has completed its acquisition of Aetna (AET).

As per the terms of the transaction, each outstanding share of Aetna common stock is being exchanged for $145.00 in cash and 0.8378 shares of CVS Health common stock. CVS Health is not issuing any fractional shares in the transaction. Instead, the total number of shares of CVS Health common stock that each Aetna shareholder is entitled to receive is being rounded down to the nearest whole number, and each Aetna shareholder is entitled to receive cash for any fractional share of CVS Health common stock that the Aetna shareholder is otherwise entitled to receive.

The transaction values Aetna at $212 per share or approximately $70 billion. Including the assumption of Aetna's debt, the total value of the transaction is $78 billion. The combined company's shares are listed on the New York Stock Exchange under the ticker symbol "CVS."

The Aetna brand name will continue to be used in reference to the health insurance products. Going forward, Aetna will operate as a stand-alone business within the CVS Health enterprise and will be led by members of its current management team.

As a result of the acquisition, shareholders are expected to benefit from a number of outcomes, including enhanced competitive positioning; the delivery of more than $750 million in synergies in 2020; and a platform from which to accelerate growth.

In connection with the acquisition, on October 10, 2018, CVS Health announced that it had entered into an agreement with the U.S. Department of Justice (DOJ) that allowed it to proceed with the acquisition of Aetna. As part of the agreement reached with the DOJ, Aetna entered into an asset purchase agreement with a subsidiary of WellCare Health Plans Inc. (WCG) for the divestiture of Aetna's stand-alone Medicare Part D prescription drug plans, which have an aggregate of approximately 2.2 million members. The divestiture transaction is expected to close within the next few business days.

Aetna will provide administrative services to and will retain the financial results of the divested plans through 2019. The acquisition of Aetna was also subject to certain state regulatory approvals which have all now been obtained.

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