- Oak Street Health disclosed on Thursday that the antitrust waiting period for its planned sale to CVS Health has expired.
- CVS and Oak Street filed the required notification forms under the Hart-Scott-Rodino Act with the Department of Justice and Federal Trade Commission on Feb. 24. The waiting period under the HSR Act ended Monday, according to a new proxy filing from Oak Street.
- The disclosure means the $10.6 billion deal has cleared one regulatory hurdle — companies can’t consummate mergers until the HSR waiting period expires — but regulators could still challenge the acquisition on antitrust grounds in the future.
CVS announced plans to acquire Oak Street in February as the retail health giant continues its push into direct care delivery. CVS’s goal is to create a vertically integrated healthcare business spanning a range of services from pharmacy to physician groups to a health plan and more.
Oak Street is a primary care practice for seniors on Medicare that contracts with the U.S. government and private payers to manage care for their members. The company has grown since its founding in 2012 to operate almost 170 centers in 21 states, and expects to have over 300 centers by 2026.
The deal is the latest between a major payer and a provider group, as health insurers look to directly influence care delivery and keep more of its healthcare dollars in house.
One antitrust advocacy group came out in opposition to the deal when it was announced. And earlier this month, Senator Elizabeth Warren, D-Mass., sent a letter to the FTC urging regulators to heavily scrutinize the deal, citing the potential risk that vertical integration could lead to higher healthcare prices.
“The acquisition of thousands of independent providers by a few massive health care megaconglomerates could reduce competition on a local or national basis, hurting patients and increasing health care costs,” Warren wrote. “I have fresh concerns in light of [CVS’s] pending acquisition of Oak Street Health.”
Despite heightened oversight from antitrust agencies, a number of big-ticke healthcare mergers have closed recently, including CVS’s $8 billion acquisition of at-home care provider Signify Health on Wednesday.
The DOJ recently dropped its appeal of UnitedHealth’s acquisition of software company Change Healthcare. Regulators also allowed Amazon’s $3.9 billion acquisition of primary care company One Medical to close without a challenge, despite pleas from some consumer protection groups.
Oak Street also announced on Thursday it’s canceling its annual board meeting following the CVS deal, which is expected to close in the first half of the year. Oak Street stockholders will meet on April 28 to vote on the sale.