On Sept. 5, CVS entered into an agreement to acquire Signify Health, a home health company, for about $8 billion. The deal, which brings Signify’s nationwide value-based provider network with more than 10,000 clinicians into CVS Health’s portfolio, is expected to close in the first half of 2023.
But, shortly after CVS entered into the agreement, primary care disruptor VillageMD, which is majority owned by Walgreens Boots Alliance, entered into an agreement to acquire physician practice group Summit Health in a transaction worth roughly $8.9 billion.
This deal would give Walgreens Boots Alliance access to about 750 primary care providers, 1,200 specialty-care providers and roughly 150 urgent care locations throughout New Jersey, New York, Connecticut, Pennsylvania and Oregon.
Amazon is also pushing to enter the healthcare market. The company currently has a $3.9 billion acquisition on the table with virtual and in-person primary care company One Medical.
If the deal is approved, it would give the retailer a larger foothold in selling healthcare services to employers.
This means CVS must make the right acquisition in order to meaningfully advance its long-term healthcare strategy as the market continues to get competitive, even if it is at the expense of profitability in the short term, experts told The Wall Street Journal.
CVS already provides limited healthcare services through its MinuteClinics and HealthHub stores, but now the key challenge is figuring out what sort of acquisition makes most sense for the retail giant.
CVS reportedly backed out of buying One Medical, which Amazon is now planning to acquire. And most recently CVS was reportedly in talks to acquire Cano Health, which operates primary-care centers, though some outlets reported CVS has allegedly backed out of that deal as well.
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