CVS Health plans to separate into two independent, publicly traded companies in the first half of 2028, with its retail network of approximately 9,000 stores becoming a standalone business.
The plan follows a strategic review by the CVS Health Board of Directors. The separation will create two distinct businesses: CVS Pharmacy will comprise the retail pharmacy and community healthcare operations, while the healthcare solutions company will encompass health benefits, pharmacy services, and care delivery.
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CVS Pharmacy’s operations will include approximately 9,000 retail pharmacies, mail pharmacy services, MinuteClinic (including virtual care), and the Health100 technology services business. CVS Health’s current group president Prem Shah 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, currently chairman and CEO of CVS Health, will serve as chairman and CEO of the healthcare solutions business.
Joyner said: “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, including with payers, pharmacy benefit managers, and manufacturers.
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.
CVS Health stated that customers, patients, and clients will continue to receive their medicines, care, benefits, and services without interruption during the transition.
The transaction is intended to be tax-free to CVS Health and its shareholders for US federal income tax purposes. Upon completion, shareholders will own shares in both publicly traded companies. Each company is 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.
