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CVS Caremark Buys Health Net Unit (CVS, HNT, WAG, ESRX)

Pharmacy services company CVS Caremark Corp. (NYSE: CVS) will pay $160 million for the Medicare prescription drug business of Health Net Inc. (NYSE: HNT). The plan currently claims 400,000 subscribers.

The acquisition follows the failure of Walgreen Co. (NYSE: WAG) to negotiate a new contract with Express Scripts Inc. (NASDAQ: ESRX). Express Scripts accounted for about $5.3 billion in Walgreen’s revenues last year.

Health Net’s Medicare prescription drug plan was a stand-alone unit of the company, and Health Net will continue to offer its own Medicare Advantage program. The acquisition is expected to close in the second quarter. Health Net expects to net about $140 million from the sale and plans to use the funds “in ways that will benefit Health Net stockholders,” according to the company’s CEO.