CVS Health Corp. (NYSE: CVS) could announce an acquisition of insurer Aetna (NYSE: AET) for more than $66 billion as early as Monday, The Wall Street Journal reported Thursday.
The talks are advanced and would likely see Aetna valued at between $200 and $205 a share and be comprised mainly of cash, the Journal reported.
The talks, like all deal discussions, could be delayed or ultimately fail, the Journal reported.
Aetna had a market capitalization of $59.27 billion after the report came out Thursday morning. Shares rose about 1%. CVS had a market capitalization of $77.2 billion as of Thursday morning, and its shares rose more than 2% on the report.
Woonsocket, Rhode Island-based CVS has been transforming itself into a health-care business for years, propelled by its acquisition of the Caremark pharmacy benefit manager platform in 2007. (A PBM typically is a third party that negotiates prescription drug benefits for a commercial health plan.)
This past quarter, CVS generated roughly 70% of its sales from its PBM business — up 8.1% from the quarter before.
An acquisition of an insurer like Aetna could give CVS more scale to bargain better prices for the prescription drugs it sells on its counters. It could fortify Aetna's insurance business by creating the ability to offer its insured cheaper co-payments, presumably only in CVS stores. Its vast retail footprint could serve as a cost-effective distribution center, or locations for in-store clinics.
CVS shares dipped $1.64, or 2.1%, to $74.96 early Friday, while Aetna shares fell 71 cents to $179.47.