CVS Health in talks to buy Oak Street Health, report says
A sign for a CVS Pharmacy in Washington, DC, on November 2, 2022.

CVS Health is exploring an acquisition of primary care center operator Oak Street Health , Bloomberg News reported on Monday citing people familiar with the matter.

Shares of Oak Street Health rose 27% in after-hours trading after closing 4.25% higher at $22.57 on Monday, earning the Chicago-based company a market cap of $5.5 billion.

No final decision has been made and discussions could fall through, the report added.

CVS declined to comment while Oak Street did not immediately respond to a Reuters request.

Oak Street Health runs primary care centers across United States for recipients of Medicare, the U.S. government insurance program for Americans aged 65 and older, and has private equity firms such as General Atlantic and Newlight Partners among its shareholders.

Drugstore chain owner CVS has been expanding its products beyond managing health and pharmacy benefits with acquisitions in recent years, including its $8 billion buyout of home healthcare service company Signify Health last year.

CVS had also expressed interest in expanding into the primary care space, and was reportedly among the bidders to acquire primary care provider Cano Health before backing out.

Earlier on Monday, CVS said it expects to exceed its full-year 2022 revenue forecast range of $309 billion to $314 billion.