CVS Health to buy Oak Street Health in $10.6bn deal

US pharmacy chain CVS Health said on Wednesday that it has agreed to buy Oak Street Health in a $10.6bn all-cash deal.

CVS will pay $39p per share for Oak Street, which runs a network of value-based primary care centres for adults on Medicare. The deal is expected to close this year.

"With an innovative care model and technology platform designed to deliver consistently superior outcomes and patient experiences, Oak Street Health has demonstrated that its model is scalable," CVS said.

It added that combining the two business "can significantly benefit patients’ long-term health by reducing care costs and improving outcomes - particularly for those in underserved communities".

CVS chief financial officer Shawn M. Guertin said: "We believe that in partnership with CVS Health, Oak Street Health can accelerate its growth and provide an attractive return to our shareholders over time.

"The pending acquisitions of Oak Street Health and Signify Health will also meaningfully advance our goal of adding 200 basis points of long-term adjusted operating income growth, a key commitment we made to shareholders at our December 2021 Investor Day."

Oak Street surged on the news and by 1140 GMT, the shares were up 29% at $33.68 in pre-market trade.