CVS to Keep Aetna in Hartford, Conn. -- 3rd Update

By Joseph De Avila 

CVS Health Corp. has decided to keep Aetna Inc. in Hartford, Conn., reversing the insurer's plan announced last year to move its corporate headquarters to New York City.

"We have no plans to relocate Aetna's operations from Hartford," CVS spokesman David Palombi said, adding that the company had met with Connecticut Gov. Dannel Malloy and Hartford Mayor Luke Bronin on Thursday.

The planned move was put on hold after CVS's December announcement that it would buy Aetna for $69 billion. Aetna said at the time the merger was announced that all of its locations would be evaluated as part of its integration with CVS.

Once the merger is complete, Hartford will be considered the "corporate hub" for the insurance business, rather than Aetna's headquarters, Mr. Palombi said. CVS will maintain its corporate headquarters in Rhode Island.

The reversal is a win for Connecticut, which has lost other corporate residents in recent years and has been struggling with budget shortfalls and declining population. The city of Hartford is in its own financial straits, relying on state aid to balance its budget.

"I'm thrilled that CVS has confirmed that Aetna will continue to call Hartford home," Mr. Malloy said.

At the time that Aetna announced its decision to leave Hartford, where it has been based since 1853, the insurer said it chose to move to New York to tap a more robust pool of talent as it sought to reposition itself as a consumer-oriented health company.

Earlier this week, New York City said it was shelving a $9.6 million incentive package offered to Aetna, citing the uncertainty caused by the merger. Empire State Development, New York state's economic development arm, also had offered the insurer $24 million in performance-based tax credits to open the office in the city.

The insurer had planned to move into a 170,000-square-foot Chelsea building developed by Vornado Realty Trust and Aurora Capital Associates, where it had signed a lease.

An Aetna spokesman said Friday that the company is still reviewing which locations it will keep, and whether it will open some sort of office in New York.

Write to Joseph De Avila at [e-mail]

(END) Dow Jones Newswires

January 12, 2018 18:18 ET (23:18 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.