CVS Health has completed its $10.6 billion purchase of primary care provider Oak Street Health, the companies announced Tuesday.
The healthcare conglomerate acquired Chicago-based Oak Street Health in an all-cash transaction for $39 per share. Oak Street Health will continue to participate in provider networks for multiple insurance companies, not just CVS Health subsidiary Aetna, the companies said in a news release.
“The biggest focus is finding that balance, keeping Oak Street, for lack of a better term, as independent as possible, so we can keep doing what we’re great at doing,” Oak Street Health CEO Mike Pykosz said. “But not missing out on the fact that the whole reason to do this in the first place was to take advantage of all of the resources that CVS can bring.”
The transaction adds a coveted primary-care asset to CVS Health's portfolio. A CVS Health spokesperson said the company will provide more details when it reports its first quarter earnings on Wednesday. Oak Street does not anticipate laying off employees, Pykosz said.
Oak Street Health operates more than 170 sites in 21 states and plans to expand to 300 by 2026, CVS Health Chief Financial Officer Shawn Guertin said during a call with investors when the deal was announced in February. Oak Street Health shareholders approved the sale Friday, according to a Securities and Exchange Commission filing.
Antitrust authorities reviewed the proposed deal but the Justice Department and the Federal Trade Commission allowed the waiting period to end without taking action to impede the transaction.
Because CVS Health does not provide a substantial amount of primary care services as of now, the deal does not raise antitrust concerns, Pykosz said. “People will make blanket statements, you know, ‘Healthcare consolidation is bad.' But let’s look at this actual transaction,” he said.
The acquisition builds upon CVS Health’s value-based care strategy, which the company has been executing through transactions and partnerships.
In March, CVS Health completed an $8 billion purchase of Dallas-based home health and physician enablement technology company Signify Health. The company inked partnerships in January with health systems including Chicago-based Rush University System for Health and Rockville Centre, New York-based Catholic Health for its Medicare Accountable Care Organization Realizing Equity, Access and Community Health -- or ACO REACH -- program. Oak Street also participates in ACO Reach, and its $14.6 million in net savings was second-most among the program's 53 participants in 2021, according to federal data.