Homepage / Technology / In wake of CVS Aetna tie up, deal speculation abounds. Here are the players to watch
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election


In wake of CVS Aetna tie up, deal speculation abounds. Here are the players to watch

CVS Health’s $69 billion acquisition of Aetna will change the pharmacy and health-care industries alike. The deal creates the first health-care triple threat, combining CVS’s pharmacy and pharmacy benefit manager platform with Aetna’s insurance business.

The threat to pharmacies — or those that own them — is the way in which the two will leverage Aetna’s network of 46 million members to drive traffic to CVS stores. Aetna subscribers will be able to pick up prescription medicine in CVS stores while receiving pharmacy and medical services. Eventually, they may also be able to find a lower co-pays only CVS.

“Over the next couple of years, you’ll see a dramatic change in terms of the store not just being about products but also service offerings that can help people on their path to better health,” CVS CEO Larry Merlo told CNBC earlier Monday.

Retailers are now facing an entirely new form of competitor, while contending with the potential threat of Amazon encroaching into their space. They have already begun to examine what the deal means for their business, and the solution may entail acquisitions, industry advisors say.

The pool of retailers directly impacted is relatively small. They include Kroger, Wal-Mart and Walgreens Boots Alliance and — to a lesser extent — Rite Aid.

Of the retailers, Walgreens arguably has the most to lose. It the most similar to CVS in business model and the most reliant on drug sales to drive traffic into stores. The household and personal care products it sells can now be found online and often for less. The retailer generated 69 percent of its U.S. sales in its pharmacy. Abroad, where the retail industry is less competitive, it generated 35 percent of its sales in its pharmacy.

But Walgreens many years ago set itself down a road different than CVS. Rather than diving into healthcare, as CVS did, Walgreens doubled down on real estate and international expansion. It acquired British pharmacy giant Alliance Boots in 2014, opening it up into Europe. It attempted to acquire Rite Aid a year later, in a $17.5 billion deal that looked to bring with it 4,600 stores. Regulators, though, whittled the deal down to a purchase of 1,932 stores for $4.37 billion.

The essentially blocked deal makes Walgreens particularly sensitive to regulatory risks posed by further deals that could come in reaction to CVS/Aetna, industry advisors say.

One possible route for Walgreens is to acquire the wholesale drug distributor AmerisourceBergen, with whom it has been partnering since 2013. Walgreens CEO, Stefano Pessina is familiar with the industry, having come from pharmaceutical wholesale.

It could also more closely follow CVS’s path, acquiring Humana, the remaining party from the abandoned Aetna-Humana tie up.

As for Rite Aid, it is now left as a distant third player to CVS and Walgreens. The retailer has a $2 billion market capitalization and roughly 4,700 stores, compared to CVS’ 10,000 and Walgreen’s 8,100. Analysts last month speculated it could be a target for Amazon, if the retail juggernaut wanted to tap Rite Aid’s pharmacy licenses and regulatory cleared stores. Amazon would also inherit pharmacy licenses in 19 states and six distribution centers.

If Amazon wanted acquire a pharmacy benefits manager platform as its entree into health care, it could look to Express Scripts. The company’s CEO recently told Bloomberg he would be “open to” a deal with an insurer. A PBM typically is a third party that negotiates prescription drug benefits for a commercial health plan. Acquiring such a company would give Amazon access to tap drug rebates for its customers.

Meantime, Walmart generates roughly 11 percent of its sales in what its calls “health and wellness,” a category that includes pharmacy, optical services, clinical services, over-the-counter drugs. With a stock that has grown 40 percent this year, giving it a $290 billion market cap, it may not feel particularly under the gun to make a large defensive play. The retailer’s focus more recently, meanwhile, has been expanding its digital initiatives, propelled by its acquisition of Jet.com.

The big box store also tends to be price conservative and averse to heavily regulated industries, as demonstrated by its resistance to unions. A deal with an insurer would flout both those predilections.

Kroger likewise has a business that far exceeds pharmacy sales. Of its 2,796 supermarkets, 2,255 have pharmacies, which generated 9 percent of its sales last year.

Diving into health-care space may be a distraction for Kroger, as it works to reinvent its food business to compete with the Amazon-Whole Foods tie up. Its still-strong food business, meanwhile, provides the company reason to draw shoppers into its stores beyond household staples. With Kroger’s stock down 22 percent this year, and it focusing on reinvesting in its core food business, it may not have the appetite for a large scale deal.

Of course, defense does not need to come in deal form. Walmart and Kroger could in theory partner with a PBM, which it could use to get better drug rates. Doing so could create an entity that rivals the scale of Walgreens.

Source: Tech CNBC
In wake of CVS Aetna tie up, deal speculation abounds. Here are the players to watch

Comments are closed.