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CVS Health to Acquire Oak Street Health – Merger Arbitrage Mondays

  • February 13, 2023

In a surprising move last week, CVS Health (CVS) announced its second multi-billion dollar acquisition within a span of 5 months. The company entered into a definitive merger agreement to acquire Oak Street Health (OSH) for $10.6 billion, representing a premium of 72.8% to Oak Street’s price on January 9, 2023, the day Bloomberg reported on CVS Health’s proposed acquisition of Oak Street.

Oak Street Health (OSH)

Headquartered in Chicago, Illinois, Oak Street Health is a healthcare services provider. It was launched in 2012 and went public in 2020. With 169 senior-focused medical centers across 21 states, the company employs over 600 primary care providers and specializes in treating Medicare Advantage patients.

Karen Lynch, CEO of CVS Health laid out a strategic vision for the company at the end of 2021, to expand beyond pharmacy services and enhance its health services in home health, primary care, and provider enablement. The company’s acquisitions of Signify Health (SGFY) and Oak Street Health (OSH) are part of this strategic vision.

On September 5, 2022, CVS Health entered into a definitive agreement to acquire Signify Health (SGFY) for $8 billion. The deal has been facing regulatory issues, with both parties receiving a second request from the DOJ.

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