The planned acquisition of Aetna Inc. by CVS Health Corp. will result in a company with a combined $23.4 billion in retirement plan assets, reports Pensions & Investments.

Rhode Island-based CVS announced Sunday that it plans to acquire Connecticut-based Aetna, with the transaction valued at approximately $77 billion.

While the deal is expected to close in the second half of 2018, it will have to run the gauntlet of regulatory and stockholder approvals first, as well as what a CVS release termed “other customary closing conditions.”

CVS has both a 401(k) plan and an employee stock ownership plan, with a combined asset value as of December 31, 2016, of $9.4 billion in assets, the report said, citing the company’s most recent 11-K filing.

As of the same date, it also had seven defined benefit plans, its most recent 10-K filing said, with a total of $624 million in assets.

Aetna, on the other hand, has a 401(k) plan with $7.5 billion in assets as of December 31, 2016, as well as $5.9 billion in DB plan assets as of the same date, according to its most recent 10-K filing.

There has as yet been no disclosure on how the combined company would handle the retirement plans and their assets once the transaction has been completed.

According to a Thompson Coburn LLP report on how benefits can be affected by mergers and acquisitions, ESOPs and DB plans can present unique challenges to acquiring firms, with the former presenting the need to preserve voting rights for ESOP shareholders and the latter offering the potential to require an infusion of funds if the plan is to be terminated—or the need to offer participants the option to have benefits paid in the form of an annuity.

In addition, successor liability can involve the acquiring firm not just in retirement plans but also executive retirement plans and retiree medical plans.

Instant Insights /

CVS acquisition of Aetna will swell retirement assets

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