CVS Health plans to split into two listed companies by 2028
· BehindLines newsroom
CVS Health announced on 4 November its intention to separate into two independent, publicly traded companies, following a strategic review led by its board. According to the group's press release filed with the SEC, the separation is expected in the first half of 2028.
On one side, a “healthcare solutions” company grouping Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health, which would temporarily keep the CVS Health name under David Joyner. On the other, CVS Pharmacy, which would take about 9,000 pharmacies, mail pharmacy, MinuteClinic and the Health100 technology business, led by Prem Shah. CVS Health shareholders would own shares in both companies, and the transaction is designed to be free of US federal tax for the group and its shareholders.
According to CNBC, the shares fell sharply on Wednesday, by more than 10%. The network notes that the move reverses the 2018 purchase of Aetna, for about 78 billion dollars, and that the stock had gained about 70% since Mr Joyner became chief executive in October 2024. The group also reported quarterly revenue of 108.40 billion dollars, against 102.87 billion a year earlier, according to CNBC. Mr Joyner presents the plan as a decision taken “from a position of strength”. Synergies between pharmacies and the pharmacy benefit manager would be kept through commercial agreements, according to CNBC. A Leerink analyst quoted by the network also sees it as a possible response to growing state scrutiny of vertical integration.
The operation remains subject to final board approval, the effectiveness of a Form 10 filed with the SEC and confirmation of the tax treatment.
What remains unknown: the detailed transaction structure, the executives and directors of the two companies, dividend amounts and the terms of the future commercial agreements. The release states there is no assurance on the timetable.