On Monday, VillageMD, a subsidiary of Walgreens, reached a deal to purchase CityMD, a chain of 370 clinics owned by parent company Summit Health.
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The deal is worth $8.9 billion, per a press release from VillageMD and Summit Health.
Investors applauded the news: Walgreens’ shares jumped about 5% on Monday morning. The purchase will expand Walgreens’ footprint as far as physical clinics.
“Together, VillageMD and Summit Health will have more than 680 provider locations in 26 markets,” the release says.
CityMD is a chain of primary and urgent care clinics primarily based in New York, New Jersey, Connecticut, Pennsylvania, and Oregon. It was founded in 2010 by a group of doctors and merged with Summit Health, a healthcare clinic group, in 2019.
VillageMD is a chain of healthcare clinics headquartered in Chicago. Walgreens Boots Alliance, (WBA) the holding company of the pharmacy chain Walgreens and Boots, will remain a majority stakeholder in VillageMD, with 53% of the company.
Cigna, a health insurance conglomerate, is also coming on as a minority owner in the deal through its wholly-owned subsidiary, Evernorth.
The transaction is subject to antitrust review but is “expected to close in the first quarter of calendar 2023,” the statement added.
It’s the latest in a series of big-business healthcare moves. Amazon, for example, shut down its telehealth initiative Amazon Care in August. It purchased One Medical, a provider of in-person and remote healthcare for $3.9 billion in July. CVS bought the home healthcare provider Signify Health in September for about $8 billion.
