Overnight in asia, youre going to see whats happening. Well talk more about whats happening here with the futures. Overnight in asia the nikkei down by 1 2 a percentage point the hang seng up by. 2 . The shanghai composite down by a similar amount in europe this morning with the green arrows there, youre going to take a look and see that gains across the board dax up by 1. 25 . Cac up by. 9 . Crude oil prices, take a look at that, too. Last week for the week they were down by 60 cents down this morning another 55 cents to 57. 82 for wti. You think you can keep bringing things in here and yes. Driving your yes. To thats exactly what i think. Because you can. Because i can. That definitely is i try to spread cheer. Grat grasso messaged me, imt on youre trying to create tension. You bring me like back you know remember your thumb was sore and i got you some epsom salt. And today you brought coffee. Thats a way to do it. Hes the man. Im half italian, half sicilian. That means dont cross him. Youre threatening me no, theres no threats whatsoever youd know if i was threatening you. Go ahead. Read on. Our big corporate story cvs health will buy aetna for 69 billion. Made aetna a deal that they couldnt refuse. Nice. Well done. Cvs Ceo Larry Merlo and aetna ceo Mark Bertolini will join us. Lets bring in Bertha Coombs she joins us youve looked into this because you were like, i need help some of the nuances. I dont understand exactly why this is going to help. I dont know if this is defensive or offensive its both its both defensive and offensive. Cvs wants to get out of the business of being a middleman. 69 billion. This would be a Record Health care deal valuing aetna at about 205 a share 13 premium to fridays Closing Price but investors would get 145 in cash for that, 67 in cvs stock. Cvs has already secured promises from financing from its banks and expects the deal to close in the first half of next year. For aetna coming off of a block deal to acquire humana, this transaction is one of the only options really to leverage its assets and scale up as an insurer. For cvs, its transformative buying a rifle wouldnt have done it but kept them in the middle this gives them the assets they need to offer a Diverse Health care option and provides value the combined company would make them really sort of the biggest firm by revenues if you look at their 2017 estimated annual revenues they have about 240 billion on the top line they have 22 million for sure from aetna 90 million in pharmacy benefit customers from cvs and they also have home care services. Theres 1100 in store clinics and of course nearly 10,000 pharmacy locations when you look at it side by side, if you move over to United Health and look at what United Health has it makes them comparable in terms of size and theyd be able to really compete on being able to offer a full Service Package to Large Employers to the government and really pull out some of that middleman excess and offer true value and really be able to talk a lot to the pharmacy guys, the pharma guys and perhaps extract better pricing. The middleman, thats what theyre messaging to say it will be good for consumers. Yeah. At the same time, what happens now is youve got some Large Employers, for example, contest. We have insurers and then we have the pharmacy benefits separate now youre going to get potentially aetna, cvs together and United Health saying, you know what, were really going to want you to keep those two together we dont want you to do it a la carte. Youll pay a price for trying to have more competition and use the different pieces separately so for employers its to kind of box them in, to have to go with one or the other. One solution off the shelf versus trying to shop around, right . Right now we have we used to have aetna, we dont we have United Health. We have United Health and cvs as the pharmacy benefit. Our company decides to do it a bit more a la carte. Other companies have gotten more benefit from being able to use the optum side of United Health and United Health benefits thats one of the things that has helped United Health to grow the other thing to think about is youll have this deal in the works. Theres a lot of sort of moving parts going on in the pharmacy benefits space at the moment because anthem wants to start its own pharmacy benefits unit and they dont want to work with express scripts anymore. So if youre sitting here right now as a Large Employer looking at what youre going to do for 2019, youre going to have anthem in transition, youre going to have cvs and aetna kind of trying to put it together and work out the kinks as one company together and then you have United Health that already has the one single option. So some benefit managers say once again while their partners are trying to make big changes or, rather, their rivals are trying to make big changes, United Health continues to go in one direction. Amazon amazon is part of this here in terms of perhaps if they really do enter the pharmacy space, but more likely amazon would enter the generic space. Thats not where the profits really are because at this point a lot of folks could offer generics with those Cash Payments of 4 you dont necessarily have to be in network. Although amazons probably a factor just in the retail end of cvs, too. Exactly in the retail end. Now cvs becomes much more of a health care play and retail. Theyre a health care play with retail thats what differentiates them from United Health. The front end got less attractive for those guys. But they want they want to leverage their retail to be able to say were also going to deliver from our Pharmacy Stores to your door and given that theyre almost in everyones neighborhood, thats a proposition. Amazon wants ai to diagnose me and i want the web services to automatically send stuff to me that is monitored by a little pharmaceutical with the sensor on it. I mean, thats thats what theyre all trying to get to. They are . They all are trying to get to utilizing ai, utilizing whether its the apple watch or your Blood Pressure cuff and amazon is trying to utilize all of that data and right do it through voice through alexa. Were not quite there yet. Its not quite there yet but its starting. Adami, how are you feeling today . Feeling great i know intuitively how i feel. I dont need a watch or a cuff. Did you take any pills today . None whatsoever, young man. Thats a loaded question i dont know how to say that. As long as your Blood Pressure is okay you can have high Blood Pressure and not know it. The silent killer they call that. Statins no. Try to live a healthy, clean life no booze. You no he what im saying . No smoking what . Im just telling you. You never drink once in a while id be more than happy to have one after the show with you today. At 9 00 a. M bertha, thank you. Joining us on the squawk news line is brian tingle. He is the Senior Analyst thank you for being with us. Thanks, becky we knew this deal was very likely to come what do you think about it now that you know the details . Its the worst kept secret on wall street for the last few weeks. As weve learned more about it its a better deal than what a lot of people expected, at least from the aetna side. A lot of people thought this would be a 5050 stock and cash deal so i think that came out a little better. The synergies of 750 million, they look pretty good. I think those are attainable but i think the key here is going back to what bertha was saying, i think what these guys are doing is playing offense and defense. Playing defense on the other hand, again, you guys talked about amazon the front end is its almost like a foregone conclusion that amazon is hitting them there its pretty good to see that this is a strategy that could help them play, like i said, both sides, offense and defense. When you say its a better deal for aetna shareholders because theyre getting more cash out of the deal, that implies that you dont want more stock, that you dont have faith in the longterm strategy. Is that the wrong assumption well, my concern with having a stock heavy deal is twofold. Number one, to make a deal creative within the first two to three years you need a much higher level of synergy if you offered more stock the second part is, you know, this is an execution dependent transaction where you really are transforming, you know, health care in general, right youre transforming these stores theres a lot of execution to risk associateds with that where you have to convert the footprint, theres a lot of investment to go into that if youre an aetna shareholder youre getting a good chunk of cash up front. It derisks the story for you a little bit longer term i like the deal. I think this is the right thing to do for the Health Care System as a whole again, there are risks near term its transformative. There are lots of moving parts that we have to consider. Brian, real quick i know joe mentioned amazon. Does this force walmarts hand does it force walmart to go and maybe make a play for humana thats a good question. Walmart has tried to get into health care. They tried to do a pbm like business as far back as 2010 if i remember right theyve been looking at ore ways to get into this business, especially the Pharmacy Benefit Management space they have a relationship with humana i dont think it necessarily forces their hand to do a deal but maybe to broaden the partnership, deepen the partnership with humana is what i would expect. Brian, thank you for joining us this morning. We appreciate your time. Thanks. By the way, folks, dont miss our exclusive interview with larry merlo and Mark Bertolini. Theyll be here at 7 00 a. M. Eastern time. Media giants disney and 21st century fox have apparently rekindled some talks wall street journal reports that a deal by disney to purchase some of foxs assets is gaining momentum the report also said cnbc Parent Company comcast remains in the mix. The talks centered around foxs movie and tv studio, its International Assets and some u. S. Cable networks, fox news and Fox Broadcast Network including sports are not expected to be sold in the transaction. Meanwhile, Washington Republicans in the Senate Passed their version of a tax reform bill early saturday morning. Now the house and senate go to work to reconcile different versions of a bill ylan mui joins us after 700 points last week, 200 indicated this morning on the dow. Up 33 yeah, joe, it is a sprint to the finish now republicans are focused on resolving the differences between the house and the senate bill these are really three big ones. The individual rate is one the house has four individual and the senate has seven the corporate rate, the house cuts that to 20 right away. The senate waits until 2019. The senate of course repeals the individual mandate in the bill the house doesnt and its still unclear how moderates in congress will feel about that approach there are also a bunch of smaller issues that could wind up becoming bigger battles down the road those include those include those include keeping the alternative minimum tax in the senate, that also includes repealing the estate tax in the senate as well and there are also different rates for pass throughs and for businesses. Now none of these seem insurmountable and it is worth noting that not one chamber is howling about what the other chamber has done so there are some areas of negotiation to be had. Also this weekend, President Trump did open the door to edging the corporate rate up to 22 in the final version of the legislation. That would make this math easier republicans had bent over backwards to stay within what was supposed to be that red line of 20 and i havent heard anyone talk seriously about abandoning that 20 rate just yet. So the next step in all of this is a conference committee. The house will vote on members today. The senate will follow suit on that soon and most of that process will happen behind the scenes they call it preconferencing and its already happening republicans will likely need right up until december 22nd to make this bill happen. Back to you guys. Right up until december 22nd for the conference or to get the bill passed in both houses to get the bill passed through both houses. Congress had been set to go on recess until the week of the 18th looks like theyll need to stay in session both to pass spending legislation and keep the government open as well as to ensure they have the time to work through all of the processes on the tax bill. Ylan, markets are obviously heartened by whats happening. One of the things i think is that trigger would have never passed muster in the house so, you know, the corporate trigger, so losing him, it was always like, oh, my god, hes going to be three, who knows with mccain and flake. Flakes going to flake, you know, but once everybody was on board, the trigger totally he was the only guy holding it up based oen that. Reporter right we talked about this on friday, joe, sort of the strategy that emerged then was just to let possibly flake and corker as well go. I thought it was really a classic mcconnell move that you saw other issues like daca being brought in to address jeff flakes concern and get him on board. They had not only enough votes to pass but a spare. Funny to watch. Mcconnell. Genius, trump. Scoff mitch. All of the guys a week ago it was like mcconnells got to go nobody can whip votes up like mitch. Go mitch. How come 22 what happened what was the thinking behind that tweet, the idea that 22 for corporate rate would be okay that prompted it or is that something that really came out of the blue, becky. I dont think republicans were expecting to hear that from the president , especially after they stayed up until 2 00 a. M. To make all of the numbers work to hit that 20 corporate rate im unclear if that is something that is actually a shift in the white houses condition. Im wondering if thats something they wanted added to the bill. Knowing the way people negotiate and knowing especially trump if its 1 or 2 it will be to help pass it. It doesnt surprise me, it surprises it doesnt surprise me to hear it, it surprises me to tweet it. I always figured he would sign something at 22 or whatever they got to his desk. Might have been his lawyer tweeting you never know now plausible. Thanks ylan mui. Were going to hear from House Majority leader Kevin Mccarthy hes going to join us at 8 00 eastern. When we come back, again, the u. S. Equity futures pointing to big gains at the open if you are just waking up, dow futures up another 220 points after the dow ended the week up 673 points last week s p futures up by 17. 5 nasdaq up by 35. The weeks record breaking week for the dow talking about that and portfolio strategy also expectations for jobs friday coming up this week thats all next right here coming up on squawk box. I think we should do that meeting tomorrow. Well wait. What did you think about her . Its definitely a new idea, but theres no business track record. Well, have you seen her work . No. Is it good . Good . At cognizant, were helping todays leading banks make better lending decisions with new sources of data so, multiply that by her followers, speaking engagements, work experience. Credit history. That more accurately assess a business chances of success. This is a good investment. Shes a good investment. Get ready, because were helping leading companies see it and see it throughwith digital. Wifiso if you cant live without it. T it. Why arent you using this guy . It makes your wifi awesomely fast. No. Still nope. Now were talking it gets you wifi here, here, and here. It even lets you take a time out. No no yes yes, indeed. Amazing speed, coverage and control. All with an xfi gateway. Find your awesome, and change the way you wifi. Welcome back, everybody. Busy week on wall street today looking for october factory orders tomorrow we get the ism services index. Then on wednesday its the adp employment report and the Third Quarter productivity numbers jobless claims of course out on thursday just like every week. The week wraps up with the november jobs report and Consumer Sentiment those both come on friday. There are a few earnings reports due this week. That list includes autozone, toll brothers, h r block and lululemon. Record breaking week for u. S. Stocks which could have been said 52 times maybe in the last year or so recordbreaking week because theres been a lot of them looking at some of your comments, steven, your comments were that the market continues to go higher based on prospects for tax reform siemian, your quote here is it can no longer be said that stock prices do not incorporate some expectations of tax code changes. So youre one of these that and i know to some extent i remember, but youre one that has been saying its global s k synchronous growth the market is up 36 theres been deregulation, animal spirits, corporate confidence, theres been consumer confidence, theres been possible taxes. All along youre saying this was set up by a synchronous Global Growth all im saying is we had the last rally thats been coincidental with tax so tax reform might be seen as a positive by the market . Of course tax reform is a positive for the market. My point is that before the last couple of weeks i would argue not much of that was built in. Larry some morummers is goin on later today its not obvious to half the country or half the political spectrum hes going to argue that its thousands will die and that only rich people will get richer. This is like a company that finds a gold mine