Reports have emerged that CVS Health is holding talks over an acquisition deal with Aetna. For starters, CVS Health is known for owning many clinics in America as well as chemists and pharmacies. On the other hand, Aetna has established itself as the largest insurance company in the United States. Information about the upcoming deal and talks were revealed by people who are close to the deal. However, they sought for anonymity as they didn’t want to risk the prospect of their careers. However, these sources confirmed that the negotiations are in their early stages and there is still a long way to go. They further confirmed that should the deal be consummated, it will involve the exchange of over $60 billion.
This is the current market value of the insurance company. This would also make the acquisition the biggest deal this year in the corporate world. At the same time, the deal would rank as the largest deal to have been conducted in the American health care. This is a continuation of an ongoing culture in the health care industry where established companies want to establish their foot in the industry by buying small upcoming businesses. This comes at an opportune moment for the insurance company as it continues to suffer from the deadlock that has been created by the repeal and replacement of the Affordable Care Act. This has resulted to skyrocketing drug prices. Pembroke Consulting president Adam J. Fein said that the deal had been coming for a long time. For starters, Pembroke is an American firm that specializes in business research and management advisory.
He further said that CVS has for a long time sought to be a health care company rather than a pharmacy since its establishment. At the same time, these negotiations are taking place at a time when the pharmacy industry is being faced with uncertainty after Amazon said that they are looking forward to providing their services to this industry. Amazon has been displacing traditional businesses that have dealt with books. Recently, the online retail giant embarked into the grocery industry. This is why experts say that the talks between Aetna and CVS is an attempt to scare Amazon from this lucrative business. When these two companies combine their assets, they have a net worth of $240 billion. This offers them quite a leverage when dealing with other drug companies while at the same time defending themselves against competitors.