Business News

CCTV Script 06/12/17

— This is the script of CNBC's news report for China's CCTV on December 6, Wednesday.

CVS Health said that it had agreed to buy Aetna for about $69 billion in a deal that would combine the drugstore giant with one of the biggest health insurers in the United States and has the potential to reshape the nation's health care industry.

The transaction, one of the largest of the year, reflects the increasingly blurred lines between the traditionally separate spheres of a rapidly changing industry.

What does the merger mean for the market? Take a look at the WALL behind me.

Revenues of these two giants are expected to reach 240 billion dollars this year, with Aetna providing insurance to 22 million people, and CVS owning 9700 pharmacies and 1100 minute clinics stateside. The latter filed 2.4 billion prescriptions in 2016 through its pharmacy benefit managers.

Now, the merger comes at a time when rapid changes in technology have raised the specter of new competitors - most notably Amazon.

Analysts told us that in the age of the internet, companies like Amazon have made transparency, access and convenience priorities among consumers. Meanwhile, the health care sector has lagged in the shift toward customer-driven models.

With this in mind, the CVS-Aetna deal has wide-ranging benefits for both companies. The acquisition of Aetna will allow CVS to provide streamlined, comprehensive care to patients at their stores and clinics, improving convenience, while potentially reducing costs.

[MARK BERTOLINI, AETNA CHAIRMAN AND CEO] "Think of an idea where we have ten thousand new front doors to the healthcare system where people can walk in, where they can ask for some help, get guided through the system. We can make the insurance the back room of the operation."

[LARRY MERLO, CVS HEALTH PRESIDENT AND CEO] "The healthcare economy is now $3.5 trillion dollars and continuing to grow at what everyone recognizes as unsustainable pace. And we think we have the opportunity here to begin to bend that cost curve, and at the same time help people achieve their best health."

The two companies see that if the transaction goes smoothly, they will see an increase of 750 million dollars in next-term synergies. The CVS-Aetna deal is just one of many the U.S. could see over the next 12 to 18 months, according to analysts, as the emphasis in the sector shifts toward the patient-driven model. And we might see more mergers in the healthcare industry before long.

CNBC's Qian Chen, reporting from Singapore.