CVS to buy Aetna in biggest health insurance merger

Drugstore chain CVS announced Sunday that it would acquire health insurer Aetna for $69 billion.

With CVS’ assumption of Aetna’s debt, the purchase totals $77 billion.

The deal is the largest ever in the health insurance space, a spot previously occupied by Express Scripts' buyout of Medco for $29 billion in 2012. The acquisition is historic as a combination of a drug store chain with a massive health insurer.

“This combination brings together the expertise of two great companies to remake the consumer health care experience,” CVS chief executive Larry Merlo said in an announcement late on Sunday. “With the analytics of Aetna and CVS Health's human touch, we will create a health care platform built around individuals.”

CVS operates 9,700 drugstores across the U.S. and Aetna insures 22 million Americans. Rumors about the acquisition had circled for several weeks.

“We look forward to working with the talented people at Aetna to position the combined company as America's front door to quality health care, integrating more closely the work of doctors, pharmacists, other health care professionals and health benefits companies to create a platform that is easier to use and less expensive for consumers,” Merlo added.

While both companies said the merger would help consumers, there was no evidence provided about how the deal would either lower drug prices or reduce insurance premiums.

"This is the next step in our journey, positioning the combined company to dramatically further empower consumers,” Aetna CEO Mark Bertolini said. “Together with CVS Health, we will better understand our members' health goals, guide them through the health care system and help them achieve their best health.”

The companies announced the deal would go through in the middle of 2018, but needs the approval of government regulators. The government is typically stringent with reviewing mergers in the healthcare space; Aetna and insurer Humana announced a $34 billion merger in 2015, but the deal was blocked by the Department of Justice earlier this year.