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)…
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.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
