On Monday, VillageMDa subsidiary of Walgreens, reached a deal to buy CityMD, a chain of 370 clinics owned by parent company Summit Health.
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The deal is worth $8.9 billion, by press release from VillageMD and Summit Health.
Investors cheered the news: Walgreens shares were up about 5% Monday morning. The purchase will expand Walgreens’ footprint to physical clinics.
“Together, VillageMD and Summit Health will have more than 680 supplier locations in 26 markets,” the release said.
CityMD is a chain of primary care and emergency care clinics located primarily in New York, New Jersey, Connecticut, Pennsylvania, and Oregon. It was Founded in 2010 by a group of doctors and merged in 2019 with Summit Health, a group of healthcare clinics.
VillageMD is a chain of health clinics headquartered in Chicago. Walgreens Boots Alliance, (WBA), the holding company for the pharmacy chain Walgreens and Boots, remains majority-owned in VillageMD, with 53% of the company.
Cigna, a health insurance conglomerate, is also acting as a minority shareholder 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 said.
It is the latest in a series of major steps in healthcare. Amazon, for example, ended its Amazon Care telehealth initiative in August. It bought One Medical, a provider of remote personal and medical care, in July for $3.9 billion. CVS bought the home care provider Signify Health in September for about $8 billion.
