The DOJ said Wednesday, Oct. 10, it is requiring the companies to divest Aetna's Medicare Part D prescription drug business in order to go through with the transaction.
The deal announced by Aetna on Sept. 27 to sell its Medicare Part D prescription drug plan business to WellCare Health Plans Inc. WCG will fully resolve the DOJ's concerns on competition, according to the news release.
Shares of CVS were up 0.7% to $80.07 and Aetna's shares climbed 1.4% to $206.46 on Wednesday morning after the news was announced.
"Today's settlement resolves competition concerns posed by this transaction and preserves competition in the sale of Medicare Part D prescription drug plans for individuals," said Assistant Attorney General Makan Delrahim of the Justice Department's Antitrust Division in a statement. "The divestitures required here allow for the creation of an integrated pharmacy and health benefits company that has the potential to generate benefits by improving the quality and lowering the costs of the healthcare services that American consumers can obtain."
Woonsocket, R.I.-based CVS said Dec. 3 it was buying Hartford, Conn.-based Aetna in a cash-and-stock deal that values the latter at about $207 a share, or $69 billion. With the assumption of debt, the total transaction value is $77 billion.
Editor's note: The full version of this article was published by The Deal, a sister publication of TheStreet that offers sophisticated insight and analysis on all types of deals, from inception to integration. Click here for a free trial.