Aetna (NYSE: AET) has reached an agreement to sell its Medicare Part D drug plan businesses to WellCare Health Plans (NYSE: WCG)
The firms did not disclose the financial terms of the deal, but said the transaction is contingent on regulatory approval from the Trump administration for CVS Health's $69-billion acquisition of Aetna.
For WellCare, the transaction would mark the third deal in just over two years, after buying Universal American in 2017 and completing its acquisition of Meridian Health earlier this month.
The insurer has a well-established Medicaid business, serving nearly three million people in the government safety net health plan, but it has been increasingly focused on growing its membership in Medicare plans for seniors.
The businesses being sold had about 2.2 million members as of June 30, Aetna said in a filing with the Securities and Exchange Commission. The company adds the sale doesn't affect Aetna's individual or group Medicare Advantage, Medicare Advantage Part D or Medicare Supplement products or plans.
The divestitures could help CVS and Aetna clear a major hurdle for approval from the Department of Justice, but it's no guarantee.
Two years ago, the DOJ still blocked Aetna's proposed $37-billion acquisition of Humana, despite an offer from the firms to divest part of their overlapping Medicare Advantage businesses covering nearly 300,000 people in a sale to Molina Health, on the grounds that their merger would be anti-competitive.
Aetna shares gained $1.36 to $203.12 early Thursday, while those in WellCare vaulted $11.25, or 3.7%, to $318.61.
