Creates an integrated pharmacy services provider

• By combining the largest US pharmacy chain with
  one of the largest prescription benefit managers
• Styled as a merger of equals

• Although many are calling deal
  a low-premium acquisition of Caremark by CVS

• CMX news - chart     CVS news - chart

• Both stocks fell after announcement

Announced 11.01.06

• Press release
• Fact sheet
• Slide presentation
• Conference call transcript
• Form 8-K (CVS)
• Form 8-K (CMX)

Closed 3.22.07

• Press release
• Form 8-K

Deal terms

• Stock merger

• 1.67 shares CVS, per CMX share
• Exchange ratio based on 90-day trading average
• Pro forma ownership: 54.5% CVS : 45.5% CMX

• Name: CVS/Caremark Corporation
• Headquarters: Rhode Island (CVS's)
• Even board split
• CVS CEO will be CEO
  CMX CEO will be Chairman
• See 8.15 of Merger Agreement
  (Post-closing corporate governance)

Developments

• CMS gets a competing offer from Express Scripts

• See Competing Offer below

• CVS - CMX investor presentation  3.05.07
• Express Script's get second request from FTC

• Caremark response  3.09.07

• ISS recommends CMX shareholders vote FOR 

• Change from prior stance on deal
• CMX press release  3.13.07
• CVS statement  3.13.07
• ESRX response
• 3.13.07

Original CVS proposal  11.01.06

• 1.67 shares CVS, per CMX share

• Styled as a merger of equals
• Pro forma ownership: 54.5% CVS : 45.5% CMX

Express Scripts competing offer  12.18.06

• Rival PBM company makes unsolicited competing offer
• Offers $58.50 per CMX share

• $29.25, plus 0.426 ESRX shares
• $26B total value

• 15% premium to value of CVS merger
  Enough to be a superior proposal?
• Use of cash would result in ESRX shareholders having
  57% of pro forma share ownership

CVS adds special cash dividend  1.16.07

• $2.00 per share dividend to be paid by CMS
  conditioned on closing of merger

• Press release
• Form 8-K summary
• Merger agreement amendment
• Letter agreement

CVS increases special cash dividend  2.13.07

• Increases dividend to $6.00 per CMS share

• Press release
• Form 8-K summary
• Merger agreement amendment

Express Scripts sweetens offer  3.07.07

• To address concerns with anti-trust delay
• Offers $0.00481 per share per day beginning 4.01.07
  until earlier of closing or 45 days after FTC clearance
  (6% annualized rate)

• ESRX press release
• Investor slide presentation

CVS best and final offer  3.08.07

• Increases CMX special cash dividend to $7.50 per share
• Will use tender offer to accelerate a 10% share buyback

• CMX press release 3.08.07
• Form 8-K summary 3.08.07
• Merger agreement amendment

Express Scripts stands pat  3.12.07

• Won't raise offer without confirmatory due diligence
• Criticizes process used by Caremark board

• ESRX press release 3.12.07 
• Slide presentation

Delaware Chancery orders delay in shareholder vote

• Denies motion to enjoin merger entirely
• Opinion

• CMX response  2.23.07
• ESRX response 2.23.07

Court denies motion to further delay CMX meeting

• CVS press release 3.07.07

Express Scripts

• ESRX refiles HSR notification

• Press release   1.31.07
• CVS response  1.31.07

• ESRX gets FTC second request

• CVS response  3.07.07

Financial

• CVS:  Evercore / Lehman
• Caremark:  UBS Securities / JP Morgan

Legal

• CVS:  Davis Polk
• Caremark:  King & Spalding
• ESRX: Skadden

Shareholder meeting scheduled for March 16

• Postponed from over Delaware litigation

• Court-ordered supplemental disclosures

Form S-4 12.19.06

• Amendment #1 1.09.07

• Exhibits

• Amendment #2 1.16.07

• Exhibits

• Amendment #3 1.18.07

• Exhibits

CMX materials

• Supplemental disclosures 2.24.07
• Letter to CMX shareholders  2.26.07

ESRX materials

• Letter to CMX shareholders  2.09.07
• Letter to CMX shareholders  2.12.07
• Letter to CMX shareholders  2.27.07
• Letter to CMX shareholders  3.09.07

Form S-4 

• Initial filing   1.16.07
• Amendment #1  2.06.07
• Amendment #2  3.09.07

Schedule TO

• Initial filing 1.16.07
• Amendment #1 1.17.07

• Amendment #2 1.23.07

• Amendment #3 1.24.07

• Amendment #4 1.31.07

• Amendment #5 2.02.07

• Amendment #6 2.02.07

• Amendment #7 2.05.07

• Amendment #8 2.06.07

• Amendment #9 2.09.07
• Amendment #10 2.09.07

• Amendment #11 2.12.07

• Amendment #12 2.13.07

• Amendment #13 2.14.07

• Amendment #14 2.26.07

• Amendment #15 2.28.07
• Amendment #16 3.08.07
• Amendment #17 3.12.07
• Amendment #18 3.12.07

Schedule 14D-9

• Initial filing 1.24.07
• Amendment #1 1.26.07
• Amendment #2 3.08.07

No shop covenant

• Merger agreement 8.07 

Break-up fee

• Reciprocal $675 mm
• Agreement 11.04

Competing Offers

Health Care M&A