CVS Health’s $77 Billion Acquisition of Aetna

Barclays and Goldman Sachs are serving as financial advisors to CVS Health, and Centerview Partners also provided financial advice to the CVS Health Board of Directors. The company was advised on legal matters by Shearman & Sterling LLP, Dechert LLP, and McDermott Will & Emery LLP. Lazard and Allen & Company LLC are serving as financial advisors to Aetna and Evercore is serving as financial advisor to Aetna’s Board of Directors. Davis Polk & Wardwell LLP is acting as Aetna’s legal advisor.

CVS Health (NYSE: CVS), a company at the forefront of changing the health care landscape, and Aetna (NYSE: AET), one of the nation’s leading diversified health care benefits companies, today announced the execution of a definitive merger agreement under which CVS Health will acquire all outstanding shares of Aetna for a combination of cash and stock. Under the terms of the merger agreement, which has been unanimously approved today by the boards of directors of each company, Aetna shareholders will receive $145.00 per share in cash and 0.8378 CVS Health shares for each Aetna share. The transaction values Aetna at approximately $207 per share or approximately $69 billion1. Including the assumption of Aetna’s debt, the total value of the transaction is $77 billion.

This transaction fills an unmet need in the current health care system and presents a unique opportunity to redefine access to high-quality care in lower cost, local settings whether in the community, at home, or through digital tools.

Under the terms of the merger agreement, each outstanding share of Aetna common stock will be exchanged for $145.00 in cash and 0.8378 shares of CVS Health common stock. Upon closing of the transaction, Aetna shareholders will own approximately 22% of the combined company and CVS Health shareholders will own approximately 78%.

The transaction is expected to close in the second half of 2018. It is subject to approval by CVS Health and Aetna shareholders, regulatory approvals and other customary closing conditions.

CVS Health intends to fund the cash portion of the transaction through a combination of existing cash on hand and debt financing. The transaction is not contingent upon receipt of financing. Barclays, Goldman Sachs and Bank of America Merrill Lynch are providing $49 billion of financing commitments.

Shearman & Sterling is advising CVS Health with a team including Creighton Condon (Picture), Robert Katz, Dan Litowitz (all New York-Mergers & Acquisitions), Doreen Lilienfeld (New York-Compensation, Governance & ERISA), Stephen Giove, Lona Nallengara (both New York-Capital Markets), Gus Atiyah (Washington, DC-Finance), Alan Goudiss, Mallory Brennan (both New York-Litigation), Larry Crouch (Menlo Park-Tax), Ethan Harris (Washington, DC-Tax) and Jordan Altman (New York-Intellectual Property Transactions). The team also included associates Cody Wright, Katie Butler, Christopher Tomlinson, Kaitlin Bruno, Kotoe Oshima (all New York-Mergers & Acquisitions), Rupa Briggs, Daniel Yao, Gina Lee (all New York-Capital Markets), Matthew Weston, Jai Garg (both New York-Compensation, Governance & ERISA), Barbara Zylberg, Arman Naraghi-Pour (both New York-Finance), Magnus Wieslander (Toronto-Finance), David Selesnick (New York-Litigation), Ryan Bray (Menlo Park-Tax) and Eric Grosshandler (New York-Tax).

McDermott is advising CVS with a Multidisciplinary Team including Jeremy Earl, Ankur J. Goel, Edward (Jed) A. Gordon, Daniel F. Gottlieb, David Guedry, Ankur Gupta, John C. Kocoras, Joanne Ludovici, Kate McDonald, Joan Polacheck, Barry J. Quirke, Timothy (Tim) S. Shuman and Lowell D. Yoder.

Davis Polk is advising Aetna with a team including Oliver Smith, John A. Bick and Harold Birnbaum and associate Darren M. Schweiger. Partners Howard Shelanski and Jesse Solomon are providing antitrust and competition advice. Partner Edmond T. FitzGerald is providing executive compensation advice. Partner Shane Tintle is providing capital markets advice. Partner William A. Curran is providing tax advice.


Involved fees earner: Oliver Smith – Davis Polk & Wardwell; John Bick – Davis Polk & Wardwell; Harold Birnbaum – Davis Polk & Wardwell; Darren Schweiger – Davis Polk & Wardwell; Howard Shelanski – Davis Polk & Wardwell; Jesse Solomon – Davis Polk & Wardwell; Edmond FitzGerald – Davis Polk & Wardwell; Shane Tintle – Davis Polk & Wardwell; William Curran – Davis Polk & Wardwell; Margaret Cremin – McDermott Will & Emery; Jeremy Earl – McDermott Will & Emery; Ankur Goel – McDermott Will & Emery; Joanne Ludovici – McDermott Will & Emery; Kate McDonald – McDermott Will & Emery; Joan Polacheck – McDermott Will & Emery; Edward Gordon – McDermott Will & Emery; Daniel Gottlieb – McDermott Will & Emery; David Guedry – McDermott Will & Emery; Ankur Gupta – McDermott Will & Emery; John Kocoras – McDermott Will & Emery; Barry Quirke – McDermott Will & Emery; Timothy Shuman – McDermott Will & Emery; Diann Smith – McDermott Will & Emery; Michael Wilder – McDermott Will & Emery; Lowell Yoder – McDermott Will & Emery; Justin Uhlemann – McDermott Will & Emery; Judith Wethall – McDermott Will & Emery; Creighton Condon – Shearman & Sterling; Robert Katz – Shearman & Sterling; Daniel Litowitz – Shearman & Sterling; Cody Wright – Shearman & Sterling; Katie Butler – Shearman & Sterling; Christopher Tomlinson – Shearman & Sterling; Kaitlin Bruno – Shearman & Sterling; Kotoe Oshima – Shearman & Sterling; Doreen Lilienfeld – Shearman & Sterling; Matthew Weston – Shearman & Sterling; Jai Garg – Shearman & Sterling; Stephen Giove – Shearman & Sterling; Lona Nallengara – Shearman & Sterling; Rupa Briggs – Shearman & Sterling; Daniel Yao – Shearman & Sterling; Gina Lee – Shearman & Sterling; Gus Atiyah – Shearman & Sterling; Barbara Zylberg – Shearman & Sterling; Arman Naraghi-Pour – Shearman & Sterling; Magnus Wieslander – Shearman & Sterling; Alan Goudiss – Shearman & Sterling; Mallory Brennan – Shearman & Sterling; David Selesnick – Shearman & Sterling; Laurence Crouch – Shearman & Sterling; Ethan Harris – Shearman & Sterling; Ryan Bray – Shearman & Sterling; Eric Grosshandler – Shearman & Sterling; Jordan Altman – Shearman & Sterling;

Law Firms: Davis Polk & Wardwell; McDermott Will & Emery; Shearman & Sterling;

Clients: Aetna Inc.; CVS Health Corporation;



Author: Ambrogio Visconti