Woonsocket, R.I. — Woonsocket-based CVS Health has unveiled plans to separate into two independent, publicly traded companies.
A healthcare solutions company will comprise Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health. In the interim, this company will be referred to as “CVS Health.” Founded in 2012, Oak Street Health offers clinics for older adults across 27 states.
The national retail pharmacy and community healthcare company will comprise approximately 9,000 CVS pharmacies, mail pharmacy, MinuteClinic and the Health100 technology services business. This company will be named “CVS Pharmacy.”
Upon separation, David Joyner, currently chairman and CEO of CVS Health, will be the chairman and CEO of the healthcare solutions company. Prem Shah, currently group president of CVS Health, will be the CEO of CVS Pharmacy. Additional leadership positions and board members will be announced at a later date.
“Our history is defined by proactively evolving to stay ahead of what’s next in healthcare, and in today’s environment, that means delivering more affordability, greater access and a simpler experience,” says Joyner. “Over the last two years, we have made meaningful progress: We built a world-class leadership team, strengthened our financials, revitalized operations across the enterprise and drove total shareholder return.”
As an independent company, CVS Pharmacy will continue to expand the services provided by its nearly 30,000 pharmacists and pursue a wider set of partnerships across the healthcare system, including with payers, pharmacy benefit managers and manufacturers. The company’s Health100 platform will deliver artificial intelligence-native products and services designed to address affordability, access and experience challenges in healthcare.
Upon completion of the transaction, CVS Health shareholders will own shares in both companies. The separation is expected to be completed in the first half of 2028, subject to customary conditions.
Goldman Sachs & Co. LLC is serving as lead financial advisor and strategic advisor to the company, with Consello also serving as financial and strategic advisor. Wachtell, Lipton, Rosen & Katz is serving as legal counsel.
In its third-quarter earnings report, also released today, CVS Health reported total revenues increased to $108.4 billion, up 5.4 percent year over year. Founded in 1963, CVS Health’s stock price opened at $85.30 per share Wednesday, Nov. 4, up slightly from $80.46 per share one year ago.
— Kristin Harlow