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news.US retail pharmacy chain CVS is to merge with drug benefits manager Caremark in a $21 billion deal. The two companies are expected to generate combined revenues of around $75 billion in 2006.
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CVS operates the largest retail pharmacy chain in the US, with approximately 6,200 stores across 43 states. Caremark is one of the largest pharmacy benefit managers in the US – acting as an agent between health plans and pharmaceutical manufacturers. It distributes drugs through its national retail pharmacy network of over 60,000 participating pharmacies and seven mail service pharmacies.
CVS also operates a $3 billion wholly owned pharmacy benefit management (PBM) and specialty pharmacy subsidiary.
The companies said the deal should drive substantial value for shareholders through increased competitive strength and significant synergies, as well as creating a platform from which to accelerate growth. The combined business is expected to fill or manage over one billion prescriptions per year.
Under the terms of the agreement, which has been billed as a merger of equals, Caremark shareholders will receive 1.67 shares of CVS for each share of Caremark.