CVS Inks Deal to Buy Oak Street Health for $10.6B

In a move aimed at growing its healthcare portfolio, CVS announced on Wednesday that it has acquired Oak Street Health for approximately $10.6 billion. Oak Street Health, a multi-payer primary care company whose patients include those on Medicare with low incomes and chronic health problems, was founded in 2012. More than 50 percent of Oak Street Health's patients have a housing, food or isolation risk factor, according to a press release. CVS will pay $39 a share in cash for the Chicago-based company, and the deal is expected to close this year.

“Combining Oak Street Health’s platform with CVS Health’s unmatched reach will create the premier value-based primary care solution,” said CVS Health President and CEO Karen Lynch. “Enhancing our value-based offerings is core to our strategy as we continue to redefine how people access and experience care that's more affordable, convenient and connected.”

Total Retail's Take: CVS has set its sights on expanding into patient care, as we saw when the company acquired in-home healthcare company Signify Health for about $8 billion in September. With its heightened focus on healthcare, CVS announced the closure of 900 stores in late 2021, saying it would focus more of its efforts on digital growth and turning its stores into destinations that offer a range of healthcare services.

CVS isn't the only pharmacy retailer after primary care businesses: Rivals Walgreens Boot Alliance and Amazon.com have each shown a newfound dedication to healthcare, no doubt as a result of the COVID-19 pandemic. Amazon introduced RxPass in early 2023, and Walgreens' clinic operator VillageMD announced the purchase of Summit Health for $8.9 billion in November.