CVS Health and Oak Street Health are moving forward with the proposed merger after overcoming a significant regulatory hurdle.
The Justice Department and the Federal Trade Commission allowed the antitrust waiting period to expire on Monday with no action to prevent the two companies from combining, the primary care provider is at Chicago Oak Street reported in a filing with the Securities and Exchange Commission on Thursday. That doesn’t stop those regulators from taking action afterward, but it does clear the way for the deal to move forward. CVS Health and Oak Street filed the necessary paperwork with the Department of Justice and the FTC on Friday, Oak Street notified the SEC.
An Oak Street spokesperson wrote in an email: “No other significant regulatory approval is a closing condition, but there are other conditions set forth in the merger agreement, including a vote of shareholder”. The FTC declined to comment. CVS Health and the Department of Justice did not respond to requests for comment.
Oak Street also notified the SEC that it is asking shareholders to approve the CVS Health agreement at its April 28 meeting. The companies announced a proposed $10.6 billion transaction. last month. CVS Health has agreed to pay $39 per share in cash and take on debt from the primary care chain.
Oak Street operates more than 170 centers in 21 states. The company plans to expand to 300 locations by 2026, CVS Health Chief Financial Officer Shawn Guertin said on a call with investors when the deal was announced. If the transaction is completed, Oak Street will be a wholly owned subsidiary of CVS Pharmacy.
Healthcare deals like this one attract regulatory scrutiny, but recent large deals persist after antitrust reviews. For example, CVS Health completed an $8 billion deal to buy Dallas-based home health and physician-assisted technology company Signify Health on Wednesday. Last week, the Justice Department and the attorney generals of Minnesota and New York backed efforts to block UnitedHealth Group’s $13 billion purchase of technology company Change Healthcare. And last month, Amazon completed the acquisition of New York and San Francisco-based primary care provider One Medical for $3.9 billion.
