Stocks rise with CVS, Caremark merger news

CVS, the second biggest US pharmacy chain, Wednesday said that it is in discussions of a possible deal with Prescription benefits manager Caremark Rx Inc. The shares of several pharmacy benefit managers climbed with the news.

The companies released a statement, saying they are not sure if an agreement will be reached or a transaction will take place. They also declined to comment further until they are done with the negotiations.

Shares of Nashville-based Caremark went up $2.63, or 5 percent, to $51.84 while CVS shares dropped $1.87, or 6 percent to $29.49 with the news.

CVS operates about 6,200 stores in 45 states after acquiring rival chain Eckerd in 2004 and 700 stores from supermarket giant Albertsons in 2006. The Woonsocket, R.I.-based company falls behind rival Walgreen Co. in total sales.

Caremark purchases drugs from pharmaceutical companies directly, and then through its nation-wide network of about 60,000 pharmacies and seven mail-order offices, the company distributes them. It also offers administrative, benefits planning, and claims to manage drug therapy, physician support, and education services.

The New York Times reported Wednesday that CVS was in advanced discussions for an acquisition of Caremark for $21 billion. Some unidentified people who are close to the negotiations were also cited.

The news of the merger also affected the shares of several other companies. Express Scripts Inc. went up $2.77, or 4 percent, to $66.43; MedcoHealth Solutions Inc. climbed $1.80, or 3 percent, to $55.24; and AmerUs Group Co. rose 5 cents to $68.53. While the companies which went down were: Universal Health Services Inc; which lost 25 cents to $52.70; Omnicare Inc. fell a penny to $37.87.