CVS Health to Split into Two Public Companies
In early 2028, CVS Health will split into two separate, publicly traded entities. The retail division, operating roughly 9,000 stores, will function as an independent company, covering retail pharmacy and community-based healthcare services.
This split will result in two distinct businesses: CVS Pharmacy and a healthcare solutions company. CVS Pharmacy will comprise approximately 9,000 retail pharmacies, mail pharmacy services, MinuteClinic (including virtual care), and the Health100 technology services business.
Prem Shah, currently the group president of CVS Health, will become CEO of CVS Pharmacy once the transaction is completed. The healthcare solutions company, provisionally named CVS Health, will comprise Aetna, CVS Caremark, CVS Specialty, Oak Street Health, and Signify Health.
David Joyner, the present chairman and CEO of CVS Health, stated: “Over the last two years, we have made meaningful progress: we built a world-class leadership team, strengthened our financials, revitalised operations across the enterprise, and drove total shareholder return.”
As an independent company, CVS Pharmacy plans to expand pharmacy-led services through its network of nearly 30,000 retail pharmacists and pursue broader partnerships across the healthcare system. Both businesses will continue to advance the Health100 technology platform, which is designed to deploy AI-native products and services to address challenges around healthcare affordability, access, and consumer experience.
For US federal income tax purposes, the transaction is intended to be tax-free for CVS Health and its shareholders. Upon completion, shareholders will own shares in both publicly traded companies, with each expected to maintain an investment-grade rating, supported by strong free cash flow and the capacity to pay an attractive dividend.
The separation remains subject to final approval by the CVS Health board of directors, the effectiveness of a Form 10 registration statement filed with the US Securities and Exchange Commission, and customary confirmation regarding the tax-free status of the transaction. Customers, patients, and clients will continue to receive their medicines, care, benefits, and services without interruption during the transition.
The company expects the separation to be completed in the first half of 2028 and will provide updates on the progress of the transaction as necessary.
