CVS to divide into two independent firms

Residents of Mecklenburg County will soon see their pharmacy and insurance services managed by two separate corporations. CVS Health announced Wednesday that it is splitting into two distinct companies. This move reverses the mergers that combined the drugstore retailer with health insurance giant Aetna and pharmacy benefit manager Caremark.

The company, valued at $117 billion, will distribute shares of both new entities to current shareholders. The transaction is tax-free and is scheduled to close in early 2028. CVS stock fell 2% in premarket trading following the announcement, after having risen 15% earlier this year.

CEO David Joyner described the change as a way to separate two strong businesses. “We’re basically taking what I believe is one great company and making it two,” Joyner said in a statement. The split unwinds a strategy that began in 2007 when CVS merged with Caremark. It also reverses the 2018 acquisition of Aetna, which cost $69 billion.

The company reported higher earnings and revenue for the third quarter on Wednesday. The improvement was driven primarily by results from its Health Care Benefits segment. CVS also raised its earnings guidance for the remainder of the year.

CVS operates 9,000 locations across the United States. Of those, 800 sites run MinuteClinics, which are staffed by nurse practitioners and physician assistants.