As reported by The Wall Street Journal, Walgreens and Humana are in preliminary talks to expand on their recent partnership including the possibility of exchanging equity stakes in their respective companies to drive alignment. While preliminary, team Nephron published a note last night looking at what “strategic benefit could be garnered from closer (though not complete) alignment between Walgreens and Humana”. Specifically the team looked at:
- Alignment clues from WBA and HUM’s community clinic pilot in Kansas City
- Application of HUM’s experience with retail-oriented PDP at WMT
- Opportunities for near-term cost savings from such a tie-up.
- WBA’s double-edged penchant for cost discipline and creativity in vertical integration.
- An analysis of the benefits of partnerships in horizontal vs. vertical alignment.
- Merger dominos: Speculation of HUM/WBA tie up could affect previous assumptions built into stocks.
With yet another variable in play, we’ve included a breakout from the note of the broader managed care segment’s market share by business segment. Please contact email@example.com for more.