CVS Health Corporation (CVS) announced plans on Wednesday to separate into two independent, publicly traded companies, reshaping one of the largest healthcare companies in the US.
Shares of CVS dropped more than 10% on Wednesday. The company also reported quarterly results.
CVS Health intends to separate its insurance, pharmacy benefit management, and healthcare services operations from its retail pharmacy and community healthcare segments.
The planned split marks a major shift from CVS Health’s long-term strategy to bring together insurance, pharmacy benefit management, and healthcare services under one single structure.
Under the proposed plan, one company will retain the CVS Health name and house Aetna, CVS Caremark, CVS Specialty, Oak Street Health, and Signify Health.
The second entity will operate under the name CVS Pharmacy. It will include approximately 9,000 retail pharmacy locations and MinuteClinic locations, among other services.
Management believes separating the businesses will allow each organization to operate with greater independence while maintaining the ability to pursue partnerships across the healthcare industry.
The planned separation is expected to be completed in the first half of 2028.
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On Wednesday, CVS also reported third quarter results with total revenue increasing 5.4% year over year to $108.4 billion, compared with $102.9 billion in the prior-year period. Adjusted earnings per share rose to $2.09 from $1.60 a year earlier.
Following the quarterly performance, CVS raised its full-year 2026 financial guidance, now expecting adjusted earnings per share of at least $8.20, compared with its previous range of $7.90 to $8.10.
Source: finance.yahoo.com
