CVS-Aetna deal scores final approvals

Flickr Creative Commons | Chez Julius Livre 1 Aetna headquarters in Hartford.

Write a Comment

By Joe Cooper

After announcing the deal about a year ago, CVS Health on Monday cleared the final regulatory hurdles in its pursuit to acquire Hartford health insurer Aetna for $69 billion.

The Rhode Island-based company’s acquisition is expected to close on or about Wednesday, Nov. 28, according to a U.S. Securities and Exchange Commission (SEC) filing Monday.

The impending closing means the CVS-Aetna deal has been greenlit by the 28 state departments of insurance. CVS last week said the deal would close a few days later than expected as approval from two states was still needed.

In October, the deal was approved by the Connecticut Insurance Department and the U.S. Justice Department, contingent on Aetna divesting its standalone Medicare Part D prescription drug plan business. The plan covers about 2.2 million members.

Under the combined company, Aetna President Karen S. Lynch will serve as the insurer’s top executive, replacing current Aetna CEO Mark Bertolini, who will join CVS' board of directors.

Also, Richard di Benedetto will remain as president of Aetna International, and Fran S. Soistman will continue as the insurer’s executive vice president and head of government services, leading the Medicare, Medicaid and Federal Plans businesses.

Aetna Chief Financial Officer Shawn M. Guertin, expected to become CFO of CVS Health, will instead resign in June 2019. Eva C. Boratto, currently CVS Health's executive vice president, controller and chief accounting officer, will succeed Guertin.

Earlier this month, CVS CEO Larry J. Merlo said the pharmacy giant will surpass its original goal of reducing $750 million in overhead costs by integrating its corporate expenses and its existing assets following the deal’s completion.

Merlo said CVS will cut medical costs by increasing adherence to prescription regimens, expanding its membership and increasing its use of storefronts to reduce emergency room visits or move expensive therapy services to lower-cost sites.

In October, CVS pledged to keep Aetna’s headquarters in Hartford for at least 10 years. It also committed to keeping staffing levels at about 5,291 employees for at least four years.

The commitment came more than a year after Aetna said it would move its corporate headquarters to New York City by late 2018.