Bloomberg: CVS Health Nears More Than $12 Bln Deal To Buy Omnicare

(RTTNews) - Drugstore chain CVS Health Corp. (CVS), which changed its name from CVS Caremark Corp. in September, is in advanced talks to acquire pharmacy services provider Omnicare, Inc. (OCR) in a deal valued at more than $12 billion, according to a Bloomberg report on Wednesday.

A deal is expected to be reached as early as this week, as the two companies are in the process of finalizing the terms of the deal. However, no agreement is certain.

Woonsocket, Rhode Island-based CVS is the biggest U.S. prescription drugs retailer.

Cincinnati, Ohio-based Omnicare, which has a current market value of $9.2 billion, has been exploring a sale since a month ago, and also hired financial advisers to assist in the process. It is the nation's largest long-term care pharmacy provider.

Both CVS and Omnicare are big players in Medicare Part D, a federal program that subsidizes medicine for retirees. The report stated that industry leader Express Scripts Holding Co. (ESRX) had also shown interest in Omnicare.

The proposed deal is part of a consolidation in the growing healthcare market so as to gain a bigger chunk to help them manage costs amid the rising drug prices.

Express Scripts had acquired Medco Health Solutions Inc. three years ago in a $34 billion deal to become an industry leader.

Meanwhile, Rite Aid Corp. (RAD) agreed to buy pharmacy benefits manager Envision Pharmaceutical Services or EnvisionRx, in a cash and stock deal valued at about $2 billion in mid-February. The deal is expected to close by September 2015.

In late March, Health insurer UnitedHealth Group Inc.'s (UNH) OptumRx agreed to buy Catamaran Corp. (CTRX, CCT.TO) in a $12.8 billion deal to create a large third-place competitor. The deal is expected to close during the fourth quarter of 2015.

CVS closed Wednesday's regular trading session at $101.27, down $1.05 or 1.03% on a volume of 3.80 million shares, while OCR closed at $94.63, up $2.29 or 2.48% on a volume of 3.57 million shares, and surged another $5.37 or 5.67% in after-hours trading.