Hartford-based Aetna Inc. declined remark Friday on a report that the well being insurer is working towards a $70 billion merger with pharmacy advantages supervisor CVS Health Corp and a deal could possibly be introduced as early as December.
Reuters, citing unnamed sources, reported the deal will most likely worth Aetna at considerably greater than $200 a share, including that an actual worth will probably be hammered out within the coming days.
Per week in the past, reviews surfaced that CVS was pursuing a buyout of Aetna, which earlier this 12 months was rebuffed by authorities regulators in a bid to buy rival Humana. Aetna noticed the Humana deal as a solution to increase its presence within the profitable Medicare Advantage enterprise however regulators noticed the specter of stifling competitors.
A merger with CVS, its roots in storefront pharmacies and now a pharmacy advantages supervisor, opened up a brand new avenue to progress in a altering well being care business.
A spokeswoman for Gov. Dannel P. Malloy Friday referred inquiries to the state Department of Economic and Community Development.
DECD Commissioner Catherine Smith mentioned there may be clearly concern about how the merger would have an effect on jobs and Aetna’s presence in Connecticut.
“Obviously, it is all speculation until they get the deal done,” Smith mentioned. “So, it’s a bit of wait and see. But I see this as more of an opportunity than a problem.”
The merger may imply that Aetna’s determination earlier this 12 months to relocate its headquarters to New York could be revisited. Smith mentioned there is also little overlap between the 2 firms and that would bode nicely for employment in Connecticut.
Smith declined to touch upon whether or not she has had any discussions with Aetna since reviews of a possible merger with CVS surfaced.
Hartford Mayor Luke Bronin didn’t have a right away remark.
Experts say bringing insurance coverage and pharmacy underneath one company umbrella has the potential to chop prices between insurers and pharmacies, eliminating the “middleman.”
And a merged firm would probably have extra leverage to barter higher costs with drug firms, they mentioned.
A CVS spokesman additionally declined to remark Friday.
Aetna Chief Executive Mark T. Bertolini has typically talked about strengthening Aetna’s relationship with CVS, together with leveraging CVS retailer footage for well being care companies equivalent to diagnostic testing, dialysis, imaginative and prescient care and different companies, whereas the 2 may develop extra dwelling well being care companies.
The CVS buyout provide got here the identical week as Aetna introduced it might promote its U.S. group life and incapacity enterprise to The Hartford. The transfer, observers mentioned, helps Aetna shed a enterprise that was not a part of its technique to turn into a well being care firm.
Word of the CVS deal despatched one other shock wave via Connecticut, coming simply months after Aetna mentioned it might relocate its headquarters from Hartford — the place the insurer was based in 1853 — to New York City. CVS is predicated in Woonsocket, R.I.
The transfer, Bertolini mentioned, would badist the insurer faucet into the “knowledge economy” because it seeks to remodel itself from a conventional well being insurer to a well being care firm.
This week, when Aetna introduced its third quarter earnings, Bertolini advised Wall Street traders that the insurer’s objective is take a extra “personalized” strategy to well being care. The use of knowledge and superior badytics will badist Aetna perceive extra clearly every of its members.
“Interpreting the data in a way that makes it actionable to impact member behavior and help improve their health will further position Aetna as partner of choice for people seeking to achieve their personal health ambition,” Bertolini mentioned.