Experts Predict FTC Will Be More Lenient Of CVS-Aetna Deal Than Justice Department
But they also say CVS's plan to buy Aetna is "eminently approvable" by either agency because critics would be unable to come up with a convincing theory to show the deal will harm consumers. Meanwhile, a House Democrat is already calling for a probe of the merger.
Reuters:
CVS Likely Wants FTC Antitrust Review, Not Justice Department, Of Aetna Deal
It is uncertain who in the U.S. government will carry out an antitrust review of CVS Health Corp's deal to buy health insurer Aetna Inc, but the drugstore company is likely hoping the potentially more lenient Federal Trade Commission gets the nod, antitrust experts say. The Justice Department's Antitrust Division and Federal Trade Commission share the job of reviewing mergers to make sure they don't hurt consumers, but sometimes it comes down to a coin toss as to who reviews a deal that involves both agencies' areas of expertise. (Bartz, 12/5)
The Hill:
Top House Dem Calls For Probe Into CVS-Aetna Merger
A top House Democrat is calling for a hearing to examine the merger between CVS and Aetna. In a letter to House Energy and Commerce Committee chairman Greg Walden (R-Ore.), the committee’s ranking member Frank Pallone Jr. (D-N.J.) asked for a hearing on the merger as soon as possible. (Weixel, 12/5)
And in more news on the $69 billion deal —
Bloomberg:
Wall Street Is Wary Of An Untested Strategy In CVS-Aetna Megamerger
The success of CVS Health Corp.’s $67.5 billion acquisition of health insurer Aetna Inc. rides on a bet on a complex and untested strategy, and some in Wall Street are questioning whether the companies can pull it off. CVS plans to build mini health centers in some of its 9,700 stores, turning them into key locations where Aetna members -- and customers of rival insurers -- get low-level care for ailments and chronic diseases. Already, CVS has 1,100 MinuteClinics in its pharmacies, and is testing out hearing and vision offerings in a handful of locations. (Tracer, 12/5)
The Wall Street Journal:
CVS Boss Larry Merlo’s Path From Corner Pharmacy To C-Suite
The architect of the year’s biggest and arguably most surprising health-care deal is a former pharmacist from rural Pennsylvania who won over Wall Street with a reboot of CVS Health Corp. Larry Merlo, CVS’s chief executive since 2011, impressed skeptics with his turnaround of Caremark, the pharmacy-benefits manager that CVS bought four years before he took over. (Terlep, 12/5)
The Wall Street Journal:
Aetna’s Outgoing CEO Set to Reap About $500 Million If CVS Deal Closes
Aetna Inc. Chief Executive Mark T. Bertolini is set to pocket roughly half a billion dollars when he leaves his company if it successfully merges with CVS Health Corp. If the $69 billion deal between the pharmacy chain and health insurer goes through, Mr. Bertolini stands to reap a generous exit payment and benefit from a sizable increase in the value of the stock and rights he owns because of the premium CVS is paying for Aetna. His combined payout is expected to be about $500 million, according to people familiar with the matter, a review of Aetna filings, and analysis from compensation-research firm Equilar Inc. (Mattioli, Mathews and Becker, 12/5)
Bloomberg:
CVS’s Aetna Takeover Comes With A $2.1 Billion Termination Fee
CVS Health Corp. could owe Aetna Inc. $2.1 billion if the drugstore chain’s acquisition of the health insurer fails, according to a merger agreement filed Tuesday. CVS would owe Aetna the funds if the deal announced Sunday fails for a variety of reasons, including if it can’t gain approval from antitrust authorities. (Tracer, 12/5)
