CVS to split off drugstore business in major breakup of healthcare giant; shares fall 10%
The move would reverse the company's $78 billion acquisition of Aetna and dismantle the vertically integrated healthcare conglomerate it created in 2018.
TL;DR
- CVS Health plans to split into two public companies by early 2028.
- The split will separate the retail pharmacy business from the insurance and pharmacy benefit manager (PBM) operations.
- This move reverses the 2018 acquisition of Aetna for $78 billion.
- The insurance and PBM entity will keep the CVS Health name and CEO David Joyner will lead it.
- The retail pharmacy business will be named CVS Pharmacy and led by Prem Shah.
- The company's stock fell approximately 10% following the announcement.
- The split is intended to create more focused companies to improve consumer engagement, affordability, and care coordination.
- The decision comes amid increased scrutiny of PBMs and vertically integrated healthcare companies.
- CVS Health also reported third-quarter earnings and revenue that exceeded Wall Street expectations.