Drug store chain CVS plans to acquire health insurer Aetna in a $69 billion deal – one of three big merger plans announced late last year.
Three planned healthcare mergers that could have a big impact on real estate are in the works
It’s been merger mania recently as three blockbuster healthcare industry deals were announced in late 2017 – all with enormous potential implications for healthcare real estate:
■ Dignity Health and CHI. Offering services at more than 700 care sites and 139 hospitals in 28 states will be a new not-for profit health system formed by the pending merger of Englewood, Calif. based Catholic Health Initiatives (CHI) and San Francisco based Dignity Health. The merged Catholic system, with about 159,000 employees and 25,000 physicians, will get a new name and a new headquarters in Chicago in 2018. CHI had revenue of $15.5 billion in its fiscal 2017 while Dignity Health had revenue of $12.9 billion. The organizations are “geographically complementary,” as there will be no overlap of hospital service areas. For more information, please visit HREInsights.com.
■ CVS and Aetna. Drug store chain CVS Health (NYSE: CVS) and health insurer Aetna (NYSE: AET) announced Dec. 3 that they have executed a definitive merger agreement under which CVS Health will acquire all outstanding shares of Aetna for a combination of cash and stock. Under the terms of the merger agreement, Aetna shareholders will receive $145 per share in cash and 0.8378 CVS Health shares for each Aetna share. The transaction values Aetna at about $207 per share or about $69 billion. CVS operates more than 9,600 retail and specialty stores across the country, which would be turned into “healthcare hubs” if the deal goes through. For more information, please visit HREInsights.com.
■ Optum and DeVita. Optum, part of Eden Prairie, Minn.-based Optum Inc., announced Dec. 6 that it will acquire El Segundo, Calif.-based DaVita Medical Group, a subsidiary of DaVita Inc. (NYSE: DVA). The $4.9 billion cash deal is expected to close in 2018 and will see DaVita Medical Group become part of the OptumCare division, which works with more than 80 health plans through about 30,000 affiliated physicians nationwide. DaVita Medical Group serves about 1.7 million patients annually at nearly 300 medical clinics. DaVita Medical Group also operates 35 urgent care centers and six outpatient surgery centers. For more information, please visit HREInsights.com.
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