CVS Health is contemplating a breakup of its diversified operations after a tumultuous financial period marked by repeated forecast cuts and a significant drop in stock value, The Wall Street Journal reported Oct. 1.
- The company has invested more than $88 billion in acquisitions over the last six years, with the aim to transform from a traditional retail pharmacy into a comprehensive retail provider. However, analysts told the news outlet that separating the integrated units could bring certain challenges.
- CVS' board is conducting a strategic review, exploring options that include a split. However, the decision is not expected in the near term, and analysts said dismantling the organization could leave certain units struggling independently, which could jeopardize customer retention and revenue streams.
- While a breakup could allow for a renewed focus on core operations, it also raises concerns about a disruption of synergies between CVS pharmacy services and its pharmacy benefit manager, CVS Caremark, according to the Journal.