CVS Health and Oak Street Health are moving ahead with their proposed merger after overcoming a key regulatory obstacle.
The Justice Department and Federal Trade Commission allowed the antitrust waiting period to lapse on Monday without taking action to prevent the two companies from combining, Chicago-based primary care provider Oak Street reported in a filing to the Securities and Exchange Commission Thursday. That doesn’t prevent those regulators from taking action at a later time, but it does clear the way for the deal to advance. CVS Health and Oak Street submitted the required paperwork to the Justice Department and the FTC on Friday, Oak Street informed the SEC.
“There are no other material regulatory approvals that are closing conditions, but there are other conditions as provided in the merger agreement, including the stockholder vote,” an Oak Street spokesperson wrote in an email. The FTC declined to comment. CVS Health and the Justice Department did not respond to requests for comment.
Oak Street also notified the SEC that it is asking shareholders to approve the CVS Health deal at a meeting on April 28. The companies announced the proposed $10.6 billion transaction last month. CVS Health agreed to pay $39 per share in cash and to assume 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 finalized, Oak Street would be a wholly owned subsidiary of CVS Pharmacy.
Healthcare transactions such as this one attract regulatory scrutiny, but recent major deals have survived antitrust reviews. For example, CVS Health completed its $8 billion deal to buy Dallas-based home health and physician enablement technology company Signify Health on Wednesday. Last week, the Justice Department and the attorneys general of Minnesota and New York backed off efforts to block UnitedHealth Group’s $13 billion purchase of based technology company Change Healthcare. And last month, Amazon completed a $3.9 billion acquisition of New York- and San Francisco-based primary care provider One Medical.
