USA — The US Department of Justice (US DOJ) is seeking for more information about CVS Health’s proposed US$8 billion acquisition of Signify Health.
The Justice Department’s request will extend the time CVS and Signify must wait before proceeding with the deal by 30 days. However, the government could waive this requirement.
According to Reuters, experts predicted that the transaction would be scrutinized in a US antitrust review after it was announced.
Large mergers and acquisitions have come under intense antitrust scrutiny, and lowering healthcare costs has been an important strategic mission for the Biden Administration.
Along these lines, CVS isn’t the only company being scrutinized as a result of an acquisition. The FTC requested information from UnitedHealth Group and LHC Group Inc. regarding the former’s pending US$8 billion acquisition of the latter.
UnitedHealth Group earlier this month completed its acquisition of Change Healthcare, after over a year of antitrust scrutiny.
Furthermore, the FTC requested additional information about Amazon’s plan to acquire One Medical for US$3.9 billion last month.
Signify’s interest in a sale was first revealed in August. The following month, CVS announced that it had reached an agreement to acquire Signify.
Acquiring Signify Health will enable CVS, which operates a pharmacy chain, a health insurance business and offers pharmacy benefit management services, to provide further care management for at-home patients.
Dallas-based Signify is a technology-enabled, value-based care platform that collaborates with health plans and health systems to provide a range of care services to patients in their homes.
The organization employs over 10,000 clinicians in all 50 states and has a nationwide value-based provider network.
Despite winning the bid, CVS was not the only company interested in acquiring Signify. UnitedHealth Group, Option Care Health, and Amazon were said to be interested in acquiring the company.
CVS Health is one of many large corporations that have expressed a desire to revolutionize the healthcare “consumer experience.”
Despite losing a bid for primary care player One Medical to Amazon Inc. In August, CVS Health CEO Karen Lynch reiterated that CVS Health intends to acquire or take a stake in a primary care company by the end of 2022.
Other potential targets for public primary care include CareMax, Cano, Agilon, and Oak Street Health, among others.
CVS Health’s strategy aligns with that of other companies, such as Amazon and Walgreens Boots Alliance, that are transitioning into nontraditional primary care providers.
According to a new Bain & Company report, nontraditional primary care providers could capture around 30% of the US market in the next ten years.
According to documents filed with the Securities and Exchange Commission, CVS expects to complete the acquisition in the first half of 2023, despite the Justice Department’s request.