Executive Summary

• On December 3, CVS Health announced its long-anticipated plan to acquire Aetna for $69 billion in cash and stock. The transaction, expected to close in the second half of 2018, requires shareholder and regulatory approvals and must meet customary closing conditions.
• The companies expect the new entity to benefit consumers through a uniquely integrated, community-based healthcare experience; the use of more integrated data and analytics; and better opportunities to fight chronic disease.
• Shareholders are expected to benefit through enhanced competitive positioning of the business, higher earnings per share and a platform from which the combined entity can accelerate growth. Over the longer term, the combined company could deliver significant incremental value from the development of new products and growth opportunities.
• The merger likely represents the first wave of pharmacies and insurance companies combining in order to better withstand the entry of Amazon into the pharmacy business, which is expected in the near term.