CVS Health Corporation (NYSE: CVS) and Aetna Inc. (NYSE: AET) held a meeting where shareholders of both companies approved the merger between the two on Tuesday. According to preliminary results, more than 98 percent of shareholders of CVS and 97 percent of Aetna shareholders voted in favor of the proposal.
In December, CVS announced that it would buy Aetna for $69 billion that would combine the drugstore and its pharmacy platform with Aetna’s health insurance business. By combining the two businesses, it would reshape the healthcare industry by offering significantly cheaper alternatives compared to it
"When this merger is complete, the combined company will be well-positioned to reshape the consumer health care experience, putting people at the center of healthcare delivery to ensure they have access to high-quality, more affordable care where they are, when they need it," said Larry Merlo, CVS Health president and CEO.
CVS’ bid for Aetna came after the healthcare sector competition began to ramp and intensify as many businesses began to enter into the industry. Analysts projected that this year would be a strong year for mergers and acquisitions in the healthcare sector.
Amazon.com Inc (NASDAQ: AMZN) reportedly received regulatory licensing to distribute pharmaceutical prescription drugs, which prompted CVS to offer a bid for Aetna. The company also announced recently in February to sell medical products.
After Amazon’s reports, Amazon along with Berkshire Hathaway Inc. (NYSE: BRK.A) and JPMorgan & Chase Co. (NYSE: JPM) announced that the three would partner up to offer its U.S. employees a cheaper but higher quality healthcare insurance for their employees.
Walgreens Boots Alliance Inc. (NASDAQ: WBA) reportedly said it was interested in acquiring the rest of its drug distributor, AmerisourceBergen (NYSE: ABC) would lower prescription drug prices as well as cutting down distribution expenses.
"At the same time, our company will benefit from a stronger market position, with the potential to deliver increased value through the development of innovative new products and services and generate long-term growth opportunities that help produce stronger, more consistent results for shareholders as a uniquely integrated health care company," Merlo concluded.
CVS and Aetna will now have to wait for the Department of Justice’s approval. If approved, the transaction is expected to close in the second half of 2018.