Dhanya Skariachan and Lewis Krauskopf
Reuters
December 31, 2010
- A d v e r t i s e m e n t
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(Reuters) – No. 2 drugstore chain CVS Caremark agreed to buy Universal American’s Medicare prescription drug business for about $1.25 billion, to expand its presence in a growing segment of pharmacy benefits management.
The deal will more than double the size of CVS Caremark’s business that provides prescription drug coverage under the Medicare Part D program. Medicare is the U.S. government’s healthcare program for the elderly.
Universal American shareholders are expected to receive about $12.80 per share to $13.00 per share in cash for the business, which accounted for less than half of the company’s total revenue in the first nine months of 2010.
Universal American shares closed at $14.61 on Thursday and rose nearly 39 percent after the deal was announced. CVS shares slipped 0.4 percent to $34.85.
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