Aetna (AET) will sell its entire standalone Medicare Part D prescription drug plan business to WellCare Health Plans, subject to closing of CVS’s (CVS) proposed acquisition of Aetna, according to a regulatory filing.
CVS said in the 8K filing with the Securities & Exchange Commission that it believes the divestiture is a “significant step” in completing the Department of Justice’s review of CVS’s purchase of Aetna. The companies are engaging in productive discussions with the DOJ.
The proposed deal between the companies is expected to close early in the fourth quarter, and CVS said it still expects the transaction to be accretive in the second full year after the close. The acquisition is expected to deliver more than $750 million in year-two synergies.
Aetna shares were up 0.6% in pre-market trading on Thursday. CVS gained 0.7%.
The amount of the divestiture wasn’t disclosed nor does it affect Aetna’s individual or group Medicare Advantage, Medicare Advantage Part D or Medicare Supplement products or plans. The company said it would provide administrative services and retain financial results of the divested business through 2019, though the sale will be finalized on Dec. 31.
Aetna’s standalone Medicare Part D prescription business had about 2.2 million members as of the end of June.
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