Caremark RX (NYSE:CMX)
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Caremark Rx, Inc. (NYSE: CMX) and CVS Corporation (NYSE: CVS) announced
today that the Registration Statement on Form S-4 relating to the
companies’ proposed merger of equals was
declared effective by the Securities and Exchange Commission.
Accordingly, Caremark and CVS will immediately commence the mailing of a
definitive joint proxy statement to Caremark shareholders of record as
of the close of business on January 15, 2007 and to CVS shareholders of
record as of the close of business on January 19, 2007.
Caremark will hold a special meeting of its shareholders to approve the
proposed merger on February 20, 2007 at 8:30 a.m., Central Time, at the
Hilton Nashville Downtown, 121 Fourth Avenue South, Nashville,
Tennessee. CVS will hold a special meeting of its shareholders for the
same purpose on February 23, 2007 at 11:00 a.m., Eastern Time, at its
corporate headquarters, One CVS Drive, Woonsocket, Rhode Island.
“We are very pleased that we have received
clearance from the SEC to move forward with our shareholder vote next
month. We remain on track to close our merger with Caremark by the end
of February,” said Tom Ryan, Chairman,
President and CEO of CVS. “The combination of
CVS and Caremark will create the services and solutions customers and
consumers have been asking for and offer a better way to deliver
pharmaceutical services and reduce healthcare costs in what is an
increasingly complex healthcare system. We believe this will translate
into greater value for shareholders of both companies.”
Caremark and CVS announced on Tuesday enhancements to the previously
announced merger of equals, including the payment of a special one-time
cash dividend of $2.00 per share to Caremark shareholders upon closing
of the transaction. The companies also announced plans to execute an
accelerated share repurchase program that will retire 150 million of the
outstanding shares of the combined company promptly after closing of the
transaction.
Mac Crawford, Chairman, President and CEO of Caremark added, “We
look forward to our respective shareholder meetings and to closing our
strategic merger of equals with CVS.”
About the CVS/Caremark Merger
On November 1, 2006, Caremark and CVS executed a merger agreement which
provides for the combination of the two companies in a transaction
structured as a merger of equals.
On December 20, 2006, the initial waiting period for the CVS/Caremark
merger as required by the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 expired without a Request for Additional Information from the
U.S. Federal Trade Commission.
On January 16, 2007, Caremark and CVS jointly announced that they had
enhanced the value of the proposed merger for shareholders of both
companies. Caremark shareholders will receive a special one-time cash
dividend of $2.00 per share upon closing of the transaction. In
addition, promptly following closing of the merger, the combined company
will retire 150 million or approximately 10% of its outstanding shares
through an accelerated share repurchase program. The share retirement is
expected to enable the combined company to achieve double-digit
cents-per-share accretion and significantly increase the combined
company's return on equity in 2008. The original terms of the
CVS/Caremark merger agreement remain unchanged.
On January 19, 2007, the Registration Statement on Form S-4 relating to
the proposed merger of Caremark and CVS was declared effective by the
Securities and Exchange Commission. The Registration Statement includes
a joint proxy statement/prospectus that will be sent to the shareholders
of both companies. Each company will immediately commence mailing of the
joint proxy statement/prospectus to its shareholders.
A special meeting of Caremark’s shareholders
to approve the merger will be held on February 20, 2007 and a special
meeting of CVS’s shareholders for the same
purpose will be held on February 23, 2007.
Caremark shareholders with questions about the merger, or who need
assistance in voting their shares, may call the company’s
proxy solicitor, Innisfree M&A Incorporated, toll-free at (877)
750-9498. Banks and brokers may call collect at (212) 750-5833.
CVS shareholders with questions about the merger, or who need assistance
in voting their shares may call the company’s
proxy solicitor, Morrow & Co., Inc., toll-free at (800) 245-1502.
About Caremark
Caremark is a leading pharmaceutical services company, providing through
its affiliates comprehensive drug benefit services to over 2,000 health
plan sponsors and their plan participants throughout the U.S. The
company's clients include corporate health plans, managed care
organizations, insurance companies, unions, government agencies and
other funded benefit plans. In addition, Caremark is a national provider
of drug benefits to eligible beneficiaries under the Medicare Part D
program. The company operates a national retail pharmacy network with
over 60,000 participating pharmacies, seven mail service pharmacies, the
industry's only FDA-regulated repackaging plant and 21 licensed
specialty pharmacies for delivery of advanced medications to individuals
with chronic or genetic diseases and disorders.
Additional information about Caremark is available at www.Caremark.com
About CVS
CVS is America's largest retail pharmacy, operating more than 6,200
retail and specialty pharmacy stores in 43 states and the District of
Columbia. With more than 40 years of dynamic growth in the retail
pharmacy industry, CVS is committed to being the easiest pharmacy
retailer for customers to use. CVS innovatively serves the healthcare
needs of all customers through its CVS /pharmacy stores; its online
pharmacy, CVS.com; its retail-based health clinic subsidiary,
MinuteClinic; and its pharmacy benefit management, mail order and
specialty pharmacy subsidiary, PharmaCare. General information about CVS
is available through the Investor Relations portion of the Company's
website, at http://investor.cvs.com,
as well as through the pressroom portion of the Company's website, at www.cvs.com/pressroom.
Cautionary Statement Regarding Forward-Looking Statements
This document contains certain forward-looking statements about CVS and
Caremark. When used in this document, the words "anticipates", "may",
"can", "believes", "expects", "projects", "intends", "likely", "will",
"to be" and any similar expressions and any other statements that are
not historical facts, in each case as they relate to CVS or Caremark or
to the combined company, the management of either such company or the
combined company or the transaction are intended to identify those
assertions as forward-looking statements. In making any of those
statements, the person making them believes that its expectations are
based on reasonable assumptions. However, any such statement may be
influenced by factors that could cause actual outcomes and results to be
materially different from those projected or anticipated. These
forward-looking statements, including, without limitation, statements
relating to anticipated accretion, return on equity, cost synergies,
incremental revenues and new products and offerings, are subject to
numerous risks and uncertainties. There are various important factors
that could cause actual results to differ materially from those in any
such forward-looking statements, many of which are beyond the control of
CVS and Caremark, including macroeconomic condition and general industry
conditions such as the competitive environment for retail pharmacy and
pharmacy benefit management companies, regulatory and litigation matters
and risks, legislative developments, changes in tax and other laws and
the effect of changes in general economic conditions, the risk that a
condition to closing of the transaction may not be satisfied, the risk
that a regulatory approval that may be required for the transaction is
not obtained or is obtained subject to conditions that are not
anticipated and other risks to consummation of the transaction. The
actual results or performance by CVS or Caremark or the combined
company, and issues relating to the transaction, could differ materially
from those expressed in, or implied by, any forward-looking statements
relating to those matters. Accordingly, no assurances can be given that
any of the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do so, what impact they will have
on the results of operations or financial condition of CVS or Caremark,
the combined company or the transaction.
Important Information for Investors and Shareholders
A Registration Statement on Form S-4, containing a joint proxy statement
and prospectus relating to the proposed merger of Caremark and CVS, was
declared effective by the Securities and Exchange Commission on January
19, 2007. CVS and Caremark urge investors and shareholders to read the
joint proxy statement/prospectus and any other relevant documents filed
by either party with the SEC because they will contain important
information.
Investors and shareholders may obtain the joint proxy statement /
prospectus and other documents filed with the SEC free of charge at the
website maintained by the SEC at www.sec.gov.
In addition, documents filed with the SEC by CVS will be available free
of charge on the investor relations portion of the CVS website at http://investor.cvs.com.
Documents filed with the SEC by Caremark will be available free of
charge on the investor relations portion of the Caremark website at www.caremark.com.
CVS and certain of its directors and executive officers are participants
in the solicitation of proxies from the shareholders of CVS in
connection with the merger. A description of the interests of CVS's
directors and executive officers in CVS is set forth in the proxy
statement for CVS's 2006 annual meeting of shareholders, which was filed
with the SEC on March 24, 2006 and in the joint proxy
statement/prospectus referred to above. Caremark, and certain of its
directors and executive officers may be deemed to be participants in the
solicitation of proxies from its shareholders in connection with the
merger. A description of the interests of Caremark's directors and
executive officers in Caremark is set forth in the proxy statement for
Caremark's 2006 annual meeting of shareholders, which was filed with the
SEC on April 7, 2006 and in the joint proxy statement/prospectus
referred to above.