(Reuters) - U.S. pharmacy operator CVS Health Corp CVS.N and health insurer Aetna Inc AET.N are working toward finalizing merger terms and announcing a deal for more than $70 billion as early as December, according to people familiar with the matter.

FILE PHOTO: The CVS logo is seen at one of their stores in Manhattan, New York, U.S., August 1, 2016. REUTERS/Andrew Kelly/File Photo

The deal would combine CVS, one of the largest U.S. pharmacy benefits managers and drugstore chains, with Aetna, one of the oldest health insurers, whose far-reaching business ranges from employer healthcare to government plans nationwide.

The companies have agreed that CVS will split its consideration for the deal between cash and CVS stock, a deal structure that would minimize tax liabilities for Aetna shareholders, the sources said.

A deal will probably value Aetna at significantly more than $200 per share, the sources said, adding that the companies will agree to an exact price closer to signing the deal in December.

The sources asked not to be identified because the negotiations are confidential. Aetna declined to comment, while CVS did not respond to a request for comment.

Aetna shares rose as much as 6 percent on the news and ended trading up 2.7 percent on Friday at $176.99. They have risen over 10 percent since Oct. 26, when the Wall Street Journal first reported that CVS and Aetna were in merger talks.

CVS shares ended trading down 0.2 percent at $69.25, giving the company a market capitalization of $70 billion.

Healthcare consolidation has been a popular route for insurers and pharmacies, under pressure from the government and large corporations to lower soaring medical costs.

Pharmacy benefit managers (PBMs) such as CVS negotiate drug benefits for health insurance plans and employers, and have in recent years taken an increasingly aggressive stance in price negotiations with drugmakers.

They often extract discounts and after-market rebates from drugmakers in exchange for including their medicines in PBM formularies with low co-payments.

A tie-up with Aetna could give CVS more leverage in its price negotiations with drug makers.

The deal would follow years of major changes to the U.S. health insurance industry under former President Barack Obama, whose 2010 Affordable Care Act created new ground rules for how insurers operate and expanded insurance to 20 million more Americans.

Republican President Donald Trump has promised to turn back many of the Affordable Care Act’s facets, but Congress has not been able to agree on a repeal or a replacement. The lack of progress, along with Trump’s executive order to bring down healthcare costs, has created uncertainty for insurers as they head into 2018.