CVS Health announced Wednesday that it plans to divide into two independent, publicly traded companies, separating its Aetna- and Caremark-led healthcare operations from its network of roughly 9,000 retail pharmacies. The move would reverse the company’s nearly decade-old strategy of bringing the businesses under one corporate roof.

The separation is expected to be completed in the first half of 2028. CVS said the split would give each company a more focused strategic direction and its own capital structure, allowing the businesses to chart their futures independently.

“Our history is defined by proactively evolving to stay ahead of what’s next in healthcare, and in today’s environment, that means delivering more affordability, greater access, and a simpler experience,” David Joyner, chair and CEO of CVS Health, said in the announcement.

Leadership Plans Take Shape as CVS To Split In 2

Once the separation is complete, Joyner is expected to lead the Aetna- and Caremark-centered healthcare solutions company as chair and CEO. Prem Shah, currently CVS Health’s group president, will become CEO of the retail pharmacy business.

The announcement marks a major strategic turn for a company that completed its acquisition of Aetna in November 2018. CVS had announced the roughly $69 billion deal in late 2017, betting that combining insurance, pharmacy benefits and retail healthcare would create a more integrated business.

Recent reports and expert commentary had indicated that a breakup was under consideration, placing the company’s long-standing structure under renewed scrutiny.

A Merger Strategy Reaches a Turning Point

The planned split signals a retreat from the model CVS pursued with the Aetna acquisition. Rather than operating as one broad healthcare enterprise, the two businesses would move forward separately, each with its own priorities and financial framework.

CVS has framed the separation as a way to respond to the changing healthcare environment, with Joyner emphasizing affordability, access and a simpler experience for consumers.

Wachtell Lipton Rosen & Katz is advising CVS on the transaction. The legal team is led by partners Edward D. Herlihy, Jacob A. Kling and George N. Tepe.