Walgreens-controlled healthcare provider VillageMD is reportedly considering a possible merger with Summit Health.
According to a Sunday (Oct. 30) Bloomberg News report, unnamed sources said the deal with Summit, a healthcare network and parent company of CityMD, would value the combined company at $5 billion to $10 billion.
An agreement could happen in the coming weeks, although negotiations could still break down, the report stated.
Walgreens invested $5.2 billion in VillageMD in 2021, increasing its stake in the company from 30% to 63%.
The news comes at a time when the company’s competitors are expanding their healthcare offerings. For example, there were reports earlier this month that CVS was considering purchasing primary healthcare provider Cano Health.
That news followed CVS Health’s September announcement that it had closed an $8 billion deal to acquire Signify Health, which uses analytics and technology to provide in-home care for health plans, employers, physician groups and health systems.
Walgreens, meanwhile, is looking to simplify its operations under three business units as part of its transformation into a “consumer-centric healthcare” company.
With prescriptions down alongside a retreat in COVID-19 vaccines and related care, Walgreens — like all of its major peers — is making a shift to deliver a range of treatments and services to customers that go well beyond dispensing medicine.
“We are rapidly scaling U.S. healthcare and are already raising long-term sales targets with a clear path to achieve profitability starting in fiscal year ’24,” CEO Rosalind Brewer said on an earnings webcast. “It’s early, but our strategy is working, and we’re making good progress on each of our four priorities, which are simplifying and strengthening the company.”
Brewer also touted the expansion of the company’s rapidly growing in-home treatment business as a centerpiece of its consumer-centric focus, as evidenced by its plan to acquire CareCentrix.
