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This excerpt taken from the CVS 8-K filed Nov 2, 2006. Nashville, TN and Woonsocket, RI, November 1, 2006 – Caremark Rx, Inc. (NYSE: CMX) and CVS Corporation (NYSE: CVS) today announced that they have entered into a definitive merger agreement to
create the nation’s premier integrated pharmacy services provider, combining one of the nation’s leading pharmaceutical services companies with the largest pharmacy chain. Under the terms of the agreement, which is a merger of equals,
Caremark shareholders will receive 1.67 shares of CVS for each share of Caremark. The exchange ratio was determined by the parties based on an average of the closing prices of the two companies over a mutually agreed trading period before
signing.
The merger is expected to create significant benefits for employers and health plans through more effective cost management and innovative new programs, and for consumers through expanded choice, unparalleled access, and more personalized services. It is also expected to drive substantial value for shareholders through a number of benefits anticipated from the combination. These anticipated benefits include increased competitive strength, the ability to achieve significant synergies from the combination, accretion to earnings in the first full year, powerful cash flow generation opportunity, and a platform from which to accelerate growth. The combined business is expected to fill or manage over one billion prescriptions per year. The new company will be called CVS/Caremark Corporation and be headquartered in Woonsocket, Rhode Island. The new pharmacy services business, including the combined pharmacy benefits management (PBM), specialty pharmacy, and disease management businesses, will be headquartered in Nashville, Tennessee. Combined projected revenues for CVS and Caremark for 2006 are estimated to be approximately $75 billion, after adjusting for inter-company transactions. “Combining Caremark’s expertise in serving employers and health plans with CVS's expertise in serving consumers will create a powerful force for change in pharmacy services,” said Mac Crawford, Chairman, CEO and President of Caremark. “Caremark has been focusing on moving our services closer to the consumer as the consumer is being asked to become more involved in their own healthcare decisions through changes in plan designs, the adoption of consumer directed plans and, of course, the introduction of Medicare Part D. This merger creates a significant platform to address the needs of both payors and consumers by providing high-quality, cost-effective services in a manner that is convenient, flexible and easy for the consumer to navigate and understand.” “This merger is a logical evolution for CVS, Caremark and the entire pharmacy industry,” said Tom Ryan, Chairman, President and CEO of CVS. “Over the past year, Mac and I have developed a shared view of where the healthcare market needs to go and how we can work together to get there first. Employers and health plans want to control costs, but also want their plan members to have access to a full range of integrated pharmacy services. Consumers of prescription drugs demand convenience and want to get more for their healthcare dollar. Together, CVS and Caremark will help manage the costs and complexities of the U.S. healthcare system, offering unparalleled access and driving superior healthcare outcomes, enhancing value for employers, health plans and consumers.” This excerpt taken from the CVS DEFA14A filed Nov 2, 2006. Nashville, TN and Woonsocket, RI, November 1, 2006 – Caremark Rx, Inc. (NYSE: CMX) and CVS Corporation (NYSE: CVS) today announced that they have entered into a definitive merger agreement to
create the nation’s premier integrated pharmacy services provider, combining one of the nation’s leading pharmaceutical services companies with the largest pharmacy chain. Under the terms of the agreement, which is a merger of equals,
Caremark shareholders will receive 1.67 shares of CVS for each share of Caremark. The exchange ratio was determined by the parties based on an average of the closing prices of the two companies over a mutually agreed trading period before
signing.
The merger is expected to create significant benefits for employers and health plans through more effective cost management and innovative new programs, and for consumers through expanded choice, unparalleled access, and more personalized services. It is also expected to drive substantial value for shareholders through a number of benefits anticipated from the combination. These anticipated benefits include increased competitive strength, the ability to achieve significant synergies from the combination, accretion to earnings in the first full year, powerful cash flow generation opportunity, and a platform from which to accelerate growth. The combined business is expected to fill or manage over one billion prescriptions per year. The new company will be called CVS/Caremark Corporation and be headquartered in Woonsocket, Rhode Island. The new pharmacy services business, including the combined pharmacy benefits management (PBM), specialty pharmacy, and disease management businesses, will be headquartered in Nashville, Tennessee. Combined projected revenues for CVS and Caremark for 2006 are estimated to be approximately $75 billion, after adjusting for inter-company transactions. “Combining Caremark’s expertise in serving employers and health plans with CVS's expertise in serving consumers will create a powerful force for change in pharmacy services,” said Mac Crawford, Chairman, CEO and President of Caremark. “Caremark has been focusing on moving our services closer to the consumer as the consumer is being asked to become more involved in their own healthcare decisions through changes in plan designs, the adoption of consumer directed plans and, of course, the introduction of Medicare Part D. This merger creates a significant platform to address the needs of both payors and consumers by providing high-quality, cost-effective services in a manner that is convenient, flexible and easy for the consumer to navigate and understand.” “This merger is a logical evolution for CVS, Caremark and the entire pharmacy industry,” said Tom Ryan, Chairman, President and CEO of CVS. “Over the past year, Mac and I have developed a shared view of where the healthcare market needs to go and how we can work together to get there first. Employers and health plans want to control costs, but also want their plan members to have access to a full range of integrated pharmacy services. Consumers of prescription drugs demand convenience and want to get more for their healthcare dollar. Together, CVS and Caremark will help manage the costs and complexities of the U.S. healthcare system, offering unparalleled access and driving superior healthcare outcomes, enhancing value for employers, health plans and consumers.” | EXCERPTS ON THIS PAGE:
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