CVS Health Plans to Split Into Separate Companies

CVS Health wants to break apart its massive empire. The company spent years combining corner drugstores with insurance giant Aetna. Now, leaders believe the pieces work better apart.

The plan follows a two-year turnaround effort. Retail pharmacies faced high costs and store closures. Today, analysts say those local shops stand on solid ground. The insurance arm and pharmacy benefit units also show fresh strength.

Running both health insurance and retail shops under one roof proved tricky. Rising medical claims hurt the insurance division. Meanwhile, retail stores fought to protect their profits. Dividing the firm lets each management team focus on its own goals.

Everyday shoppers might see smoother visits at their local pharmacy counter. Investors favor corporate splits because standalone firms unlock hidden value. Both new companies will compete for customers on their own merits.

Source: CNBC