NEW YORK ( TheStreet)-- CVS Caremark ( CVS) is acquiring Universal American's Medicare's ( UAM) Medicare Part D business for $1.25 billion.

Universal American shareholders are expected to receive about $12.80 to $13 per share in cash from the acquisition, according to a press release.

CVS shares were down 10 cents at $34.90, and Universal American shares were up $5.79 at $20.40 on the deal.

The deal will more than double the size of CVS Caremark's Medicare Part D program to over 3 million members, according to a company press release. The deal is expected to be a beneficial move for CVS as baby boomers are coming of retirement age and are likely to receive their prescription drug coverage under Medicare plans as health care reform takes place. Medicare Part D is a federal program that subsidizes the prescription drug costs of the program's participants.

CVS said the the deal will be accretive to earnings per share in its first full year. The acquisition is expected to close by the end of the second quarter.

--Written by Maria Woehr in New York.

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