CVS Health building

As forecast, the Merger and Acquisition trend which we have been long reporting would peak when the Federal Reserve would aggressively raise interest rates and cut off the cheap money supply has taken a turn. 

Now, according to the Financial Times, U.S. M&A activity fell 43 percent in recent months. They also note that while autumn is the time for new stock sales and corporate mergers, with interest rates going up, they “slowed to a trickle.” Here is the latest “trickle.” 


CVS Health Corp. will pay $39 a share, or about $10.6 billion in cash, to buy Oak Street Health, a U.S. network of 600 physicians and nurse practitioners in 169 clinics specializing in services for elderly on Medicare.

The purchase expands the range of services the CVS corporate entity supplies, including vaccinations and strep tests in its pharmacies.

CVS began in 1963 as a retailer of health and beauty products and has since bought its way to become one of the largest health-related entities in the U.S., owning 10,000 pharmacies, Aetna insurance, and CVS Caremark, a major prescription service plan.

Last fall, CVS bought Signify Health for $8 billion.

Adding doctors to its roster is a priority for CVS and will help it better direct the full continuum of care services for each patient and customer, CEO Karen Lynch said in announcing the new purchase.

The latest tie-up is part of a larger trend in which medical service companies are consolidating, uniting medical care, prescription dispensing, lab tests, and other services under single corporate umbrellas.

Insurance companies offering Medicare Advantage plans, the private version of Medicare, have been especially active.

The Optum division of UnitedHealth, a major Medicare Advantage insurance provider, has been scooping up medical practices for more than 10 years and owns a major surgical center.

Centerwell is owned by Humana Inc., also a large provider of Medicare Advantage plans, and has been stockpiling primary care centers and operates a home health service.

“UnitedHealth and Humana have proven that you can double your profit per patient if you’re both the [insurance] plan and the doctor group,” Raymond James analyst John Ransom told the Wall Street Journal.

Walgreens Boots Alliance, the second-largest U.S. pharmacy chain after CVS, holds a majority interest in VillageMD, a chain of primary care clinics serving 1.6 million patients, the company says.

About 200 VillageMD clinics are physically attached to Walgreens pharmacies. The company plans another 600 drugstore-clinic sites by 2025 and 1,000 by 2027.


Credit Suisse is in discussions with a group of investors, including private equity goliath Apollo Global Management, to buy a large portion of Credit Suisse’s troubled advisory services division.

Previously, Apollo agreed to take over the bank’s operation that bundles and sells debt as an investment product.

Pacific Investment Management, a division of Allianz, also is mulling taking a part of the deal, The Wall Street Journal reported.

The division is being spun off as a separate entity called CS First Boston after the bank endured a series of scandals, including a leak of details of private accounts to a German newspaper, the collapse of Greensill Capital in which the bank had a $10-billion investment, and being convicted in a Swiss criminal court on charges of money laundering for a cocaine cartel.

The bank has a $500-million commitment from a private party for the sale, board chair Axel Lehmann has announced.

CS First Boston will concentrate on services requiring modest capital, such as advising companies regarding mergers and acquisitions, the new entity said.

CS First could show revenue of $2.5 billion annually, which would value the new company at about $4 billion, the WSJ said.

Atlas Merchant Capital and Saudi crown prince Mohammed Bin Salman also have expressed interest in buying into the deal, according to the WSJ.

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