The key facts

  • CVS Health will split into two public companies: the insurance business (Aetna, CVS Caremark) and a retail network of 9,000 pharmacies
  • The separation is planned to be completed in the first half of 2028, subject to final board approval
  • Shareholders will receive shares in both companies; the deal structure is designed to be tax-free for US federal taxes

Splitting into two companies

American healthcare company CVS Health announced on Wednesday a plan to separate its retail pharmacy business from its health insurance and pharmacy services business, creating two publicly traded companies. According to Anadolu, citing a company statement, the separation is expected to be completed in the first half of 2028, subject to final approval by the board of directors and the fulfillment of other conditions. After the separation, CVS Health shareholders will own shares in both companies.

Structure of the future companies

The healthcare solutions company, which will retain the CVS Health name until the transition is complete, will bring together insurer Aetna, pharmacy benefit manager CVS Caremark, specialty pharmacy CVS Specialty, as well as the Oak Street Health and Signify Health clinics. The second company, which will be named CVS Pharmacy, will operate 9,000 retail pharmacies, along with a mail-order pharmacy, the MinuteClinic network, and the Health100 technology business.

Leadership and deal terms

CVS Health chairman and CEO David Joyner will retain both positions at the healthcare solutions company, while current group president Prem Shah will lead CVS Pharmacy as CEO. According to the company, both entities are expected to receive investment-grade credit ratings and generate sustainable free cash flow; the separation is planned to be structured as tax-free for the company and its shareholders for US federal income tax purposes. The company also assured that patients and customers will continue to receive medications, care, and benefits without interruption during the transition period.