CVS Health Corporation (CVS - Free Report) recently informed that it expects the earlier-announced acquisition of Aetna to be completed on or around Nov 28, 2018. This came close on the heels of the company getting the final regulatory approval required for culminating this $69-billion consolidation.
Of late, CVS Health stated that it is making a good progress with the integration work. As announced earlier, both companies can now begin executing the integration plans as the final approvals have been already obtained.
Notably, both CVS Health and Aetna are hopeful about this consolidation, aimed at revolutionizing consumer health care experience and substantial cost reduction. According to the two companies, the transaction is all about significant value creation.
Aetna Deal Synergy Benefits at a Glance
CVS Health is highly optimistic about this merger, slated to combine the analytics of Aetna with its ‘touch of humanity’ on the health care turf and help create a robust platform to serve individuals better. Per the company, this merger in the long haul has great potential to deliver a significant incremental value in terms of developing products and generating growth opportunities as a uniquely integrated retailer, pharmacy benefits manager and a far-sighted health planner.
During CVS Health’s third-quarter 2018 earnings call earlier this month, it notified that the combined entity is expected to generate more than $750 million in savings in the second year of the acquisition’s completion by just combining both the companies’ existing assets and capabilities. A majority of these synergies will be derived from decreased corporate expenses and the blending of both companies’ operations along with some cutbacks in medical costs.
Per CVS Health, shareholders can look forward to several outcomes with respect to the near-term synergy including an enhanced competitive positioning and a new unified platform that might redefine access to high-quality care at low cost, substantially accelerating the consolidated business’ growth.
Share Price Performance
CVS Health has been observed to outperform its industry in the past year. The stock has gained 7.1% compared with the 6.1% rise of the industry.
Zacks Rank and Key Picks
CVS Health currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space are Integer Holdings Corporation (ITGR - Free Report) , Surmodics, Inc. (SRDX - Free Report) and Veeva Systems (VEEV - Free Report) .
Integer Holdings has an expected earnings growth rate of 31.2% for the fourth quarter of 2018 and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Surmodics’ long-term earnings growth rate is projected at 10%. The stock carries a Zacks Rank of 2.
Veeva Systems’ long-term earnings growth rate is estimated at 19.3%. The stock is a Zacks #2 Ranked player at the moment.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>