In a groundbreaking deal for the healthcare industry, CVS Health acquired Aetna for $69 billion.
Here are five things to know:
1. Under terms of the deal, CVS Health would acquire all outstanding shares of Aetna for a combination of cash and stock. Aetna shareholders are slotted to receive $145.00 per share in cash as well as 0.8378 CVS Health shares for each Aetna share. In total, the transaction is valued at around $207 per share. When the transaction closes, Aetna shareholders will own around 22 percent of the combined company.
2. CVS will assume Aetna's debt, which brings to total value of the transaction to $77 billion.
3. The transaction will fill an "unmet need" in the healthcare system, according to CVS, and represents an evolution of both companies as they seek to succeed in consumer-driven healthcare. CVS has taken several steps to become an integrated healthcare company over the past few years, while Aetna is expanding efforts from those related to a traditional payer to focus on consumer well-being.
"With the analytics of Aetna and CVS Health's human touch, we will create a healthcare platform built around individuals," said CVS Health President and CEO Larry Merlo. "We look forward to working with the talented people at Aetna to position the combined company as America's front door to quality healthcare, integrating more closely the work of doctors, pharmacists and other healthcare professionals and health benefits companies to create a platform that is easier to use and less expensive for consumers."
4. CVS expects the transaction to close in the second half of 2018 pending approval by shareholders from both companies and regulatory approval. Barclays, Goldman Sachs and Bank of America Merrill Lynch provided $49 billion of financing commitments for the transaction.
5. When the transaction closes, Aetna's CEO Mark Bertolini and two other directors will join the CVS Health Board of Directors. Aetna's management team will play a significant role in the new combined company, and Aetna will operate as a standalone business unit within the CVS Health enterprise.