CVS announces plans to split into two separate public companies

CVS Health announced on Wednesday that it plans to split into two separate companies by early 2028, separating its pharmacies from the Aetna insurance company it bought for $78 million.

The move is a major dismantling of the $117 billion healthcare conglomerate CVS Health spent years building, according to Reuters.

One company will consist of Aetna and pharmacy-benefit manager (PBM) Caremark, while the other company will handle CVS’ 9,000 retail pharmacies, The Wall Street Journal reported.

The announcement comes nearly a decade after CVS and Aetna merged, according to the newspaper.

“We believe based off of where we are and how we’re performing, the businesses are best served by splitting,” CVS Chief Executive David Joyner said in a statement. “We’re basically taking what I believe is one great company and making it two.”

The decision follows a “comprehensive strategic review” by the company’s board of directors, CNBC reported, citing the CVS Health news release.

Joyner said the breakup will enable the two separate management teams to focus more on their respective businesses and be more agile.

One of the two new firms will keep the CVS Health name and will be run by Joyner, according to The Wall Street Journal. In addition to the insurance and PBM assets, that company will include Oak Street Health’s senior clinics, the home-visit provider Signify Health, and CVS’ specialty-drug business.

Prem Shah, currently Group President of CVS Health, will be the CEO of CVS Pharmacy, according to the news release.

After CVS’ split, the two resulting companies will both be publicly traded, The Wall Street Journal reported. Current shareholders will own shares in both companies, CVS Health said.

CVS shares fell 12.6% to $79.94 after the announcement, Reuters reported.

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