CVS Health to acquire health care platform Oak Street Health for $10.6bn

American health solutions company CVS Health will acquire Oak Street Health in an all-cash transaction valued at around $10.6 billion to advance its care delivery strategy.

With the proposed acquisition, CVS Health anticipates to create the premier value-based primary care solution to minimize care costs and improve results for patients.

The transaction is anticipated to yield synergies of more than $500 million over time, increasing CVS Health’s long-term adjusted operating income growth.

Founded in 2012, Oak Street Health is a network of value-based primary care centers for adults on Medicare.

Oak Street Health with over 160 centers across 21 states, is the only primary care provider to carry the American Association of Retired Persons (AARP) name.

Karen S Lynch — CVS Health President and CEO, commenting on CVS Health acquisition of Oak Street Health, said: “Combining Oak Street Health’s platform with CVS Health’s unmatched reach will create the premier value-based primary care solution.

“Enhancing our value-based offerings is core to our strategy as we continue to redefine how people access and experience care that is more affordable, convenient and connected.”

Oak Street Health’s technology solution Canopy is fully integrated with the company’s operations and is used to zero in on the suitable patient care, which will be in turn enhanced by CVS Health’s home, community, and digital offerings.

Commenting on CVS Health acquisition of Oak Street Health, Mike Pykosz — Oak Street Health CEO, said: “This agreement with CVS Health will accelerate our ability to deliver on our mission and continue improving health outcomes, lowering medical costs, and providing a better patient experience while offering significant value to our shareholders.”

CVS Health anticipates Oak Street Health will have more than 300 centers by 2026, each with potential to contribute $7 million.

The close of the acquisition is anticipated in 2023, subject to regulatory approval and other customary closing conditions.

In September 2022, CVS Health entered into an agreement to acquire health care platform Signify Health for approximately $8 billion.