VillageMD, which is owned by Walgreens, is on the verge of a $9 billion merger with Summit Health, following a trend of consumer health brands expanding into primary care.
According to those familiar with the issue, a purchase agreement might be made as soon as Monday, according to The Wall Street Journal. Summit Health, which operates CityMD, an urgent care service, may join the village.
According to insiders, health insurer Cigna is expected to invest in the combined firm, however, there is no guarantee the two parties will achieve an agreement. Representatives from Summit Health and VillageMD were not immediately available for comment.
Walgreens spent $5.2 billion in VillageMD last year, gaining 63% control.
As previously indicated when rumors of the merger first surfaced last week, this purchase occurs at a time when Walgreens and its competitors are expanding their healthcare offerings.
CVS said in October that it was exploring buying primary care provider Cano Health. Furthermore, the company just completed a $8 billion acquisition of Signify Health, which provides in-home care for health insurers, employers, physician groups, and health systems using analytics and technology.
Meanwhile, as part of its transformation into a “consumer-centric healthcare” company, Walgreens is seeking to consolidate its operations into three core sectors.
As prescriptions and COVID-19 vaccines and related care decline, Walgreens, like all of its major rivals, is pivoting to deliver a variety of treatments and services to consumers that go well beyond medication distribution.
“We are rapidly developing healthcare in the United States and are already raising long-term revenue estimates with a clear path to profitability beginning in fiscal year ’24,” said CEO Rosalind Brewer during a recent earnings webcast. “It’s early, but our strategy is working, and we’re making significant progress on each of our four priorities: simplification and organization strengthening.”
