CVS Health Corporation stockholders voted in a special meeting Tuesday to approve the shares of company stock to be issued in the acquisition of mega-insurer Aetna. According to the preliminary results announced at that meeting, more than 98 percent of the shares voted were in favor of the proposal, CVS Health said.
In a separate special meeting, Aetna stockholders also overwhelmingly said yes to the acquisition by CVS Health, with approximately 97 percent of the votes cast, and over 77 percent of the 326,942,525 shares outstanding and entitled to vote, approving the deal.
"The combination of CVS Health and Aetna brings together two complementary businesses with an expanded set of unique capabilities to create a new community-based open healthcare model that is easier to use and less expensive for consumers," CVS Health CEO Larry Merlo said in a statement. "Our company will benefit from a stronger market position, with the potential to deliver increased value through the development of new products and services and generate long-term growth opportunities that help produce results for shareholders as a uniquely integrated company."
The deal, valued at $77 billion, was first announced in early December. It poses a potentially significant shakeup to both the payer and provider space considering the companies' core strengths of an expansive provider network and health insurance coverage as well as expanded access to care in CVS Health's 9,700 pharmacy locations and 1,100 MinuteClinic walk-in clinics.
The proposed merger did hit a snag in early February when the DOJ requested more information on the deal from both companies, extending a waiting period mandated by an antitrust law known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The waiting period was originally set to expire on February 1, however, the request for additional information extended the waiting period by 30 days. According to the SEC filing related to the DOJ's request, CVS Health and Aetna have been cooperating with DOJ staff.
"Both companies continue to cooperate with the Department of Justice staff in its review of the transaction. With a deal of this size, we always expected that we would receive a second request. In fact, the timetable we laid out in our initial press release and in our S-4 filing reflected this. Things are progressing as planned and we continue to expect that the transaction will close in the second half of 2018, subject to required regulatory approvals," said Joe Goode, director of corporate public relations for CVS Health.
CVS Health and Aetna had each scheduled a stockholder or shareholder meeting on March 20 to get the respective approvals, so Tuesday's announcements come earlier than anticipated.