CVS $26.5 billion acquisition of Caremark approved - East Valley Tribune: Business

CVS $26.5 billion acquisition of Caremark approved

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Posted: Saturday, March 17, 2007 1:10 am | Updated: 7:11 pm, Fri Oct 7, 2011.

Caremark Rx shareholders approved a $26.5 billion acquisition by drugstore operator CVS Corp., the pharmacy benefits manager announced Friday.

Caremark’s rival Express Scripts and CVS have been battling for months to acquire Caremark. But increased antitrust scrutiny of Express Scripts’ proposed deal and its decision earlier this week not to increase its offer turned the bidding war in CVS’ favor, some analysts said.

Caremark announced after a 15-minute shareholder meeting in Nashville, Tenn., that more than 50 percent of the shares voted were cast in favor of the deal.

Company officials said they will not have a breakdown on the votes for and against until the tally is certified by an independent accounting firm sometime next week. But they said a “substantial majority” of outstanding shares voted for the deal.

Caremark has about 2,500 employees in the Valley between its mail service pharmacy near the Tempe-Phoenix border, and its corporate campus and call center on Shea Boulevard east of Loop 101 in Scottsdale.

The acquisition isn’t expected to have any effect on Caremark’s Valley operations, said Susan Bro, corporate spokeswoman.

“We anticipate very little to no disruption at all,” she said. “We have several

operations in that area and we provide a number of functions there principally focused on serving our many customers and their (pharmacy benefits) plan participants.”

CVS Corp. has 119 CVS/ pharmacy stores in Arizona. The company plans to release more information next week concerning its plans for Caremark.

There were no stockholder comments at Friday’s meeting, which was held in the city where the company is based. About 200 people attended, including several analysts, and officials from Caremark and Express Scripts.

The deal, which Caremark and CVS have described as a “merger of equals,” would create a $75 billion drug distribution powerhouse that could compete more effectively for customers and drive a harder bargain with drugmakers.

“The shareholders spoke. We’re gratified they realized the value of this combination as we go forward,” said Mac Crawford, chairman, chief executive and president of Caremark. “I think we have got a very good outcome for our shareholders.”

With approval from shareholders, Caremark officials say they now expect to close on the deal by next week.

CVS shareholders had approved the stock and cash buyout Thursday. Express Scripts’ bid was slightly higher, valued at about $27.2 billion based on Thursday’s closing stock price, but hasn’t been approved by the Federal Trade Commission.

The CVS bid has already been approved by the FTC.

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