In this post, you will find a few updates on currently followed deals.
Little by little, I will try to expand to other special situations covering deals that I find particularly interesting. The goal is still to make these series into daily posts.
Updates On Healthcare Mergers
As expected, Cigna (CI) - Express Scripts (ESRX) deal has received DOJ green light last week, which was a major approval required and certainly a huge hurdle off their backs. Cigna has also previously announced that it will update shareholders on the upcoming meetings over the next several weeks. So far, 16 regulatory approvals have been received, but 13 are still pending. Companies expect to close the deal by the end of 2018. However, surprisingly, the spread has widened to around 7% from 4% since the last time we’ve covered this deal. Besides that, according to rumors, CVS-Aetna deal was nearing DOJ approval at the same time as Cigna’s, although it is apparently taking more time due to divestments, which are expected to be required in Medicare Part D and even a potential buyer is named (WellCare (WCG)).
New York regulator's letter has expressed a lot of concerns to Connecticut’s insurance department about a deal between CVS (NYSE:CVS) - Aetna (AET). The hearing in Connecticut is scheduled to 4th of October. The biggest concerns are related to antitrust. CVS is currently leading the PBM market and getting Aetna, which is a 7th biggest competitor, would strengthen the dominance and further disturb the competition, not to mention that top three leaders already have over 70% of the market. Natural synergies between the companies, plus a huge hurdle of additional $40m debt, would definitely put pressure on the companies to escalate prices and therefore premiums, moreover, to cut investments that could be beneficial to consumers and the market.
