CVS Health is moving aggressively in racing competitors to expand its brick-and-mortar footprint in primary care by striking a roughly $10.6 billion deal to buy Oak Street Health, the operator of nearly 170 medical centers focused on older Americans.

CVS, based in Woonsocket, Rhode Island, and Oak Street, headquartered in Chicago, said Wednesday they had agreed to the all-cash transaction at $39 per share. In a statement, CVS said that Oak Street’s primary care facilities serve senior adults and “are located where healthcare services are needed most” with more than 50% of its patients facing a housing, food or isolation risk. CVS and Oak Street said they expect the transaction to close this year.

With the nation’s population aging, drugstore chains such as CVS and even consumer brands are expanding into the primary healthcare business through mergers and acquisitions. CVS already has a beach head, as does its pharmacy chain rival Walgreens Boot Alliance.

In September, CVS announced a deal to acquire home healthcare provider Signify Healthcare for $8 billion. Walgreens is purchasing, via its VillageMD unit’s $8.9 billion deal, Summit Health, parent of urgent care chain CityMD.

And both e-commerce giant Amazon and retail behemoth Walmart are expanding into primary care, as well. Last summer e-commerce juggernaut Amazon said it was buying 1Lifecare Health, a primary care company that operates as One Medical, a turnkey network of 188 primary care clinics across the United States, for roughly $4 billion. And Walmart has been rolling out healthcare centers adjacent to its Supercenters.

“Enhancing our value-based offerings is core to our strategy as we continue to redefine how people access and experience care that is more affordable, convenient and connected,” CVS Health President and CEO Karen Lynch said in a statement about the Oak Street acquisition.

Founded in 2012, Oak Street describes itself as a network of value-based primary care centers for adults on Medicare. It employs about 600 primary care providers and has 169 medical centers across 21 states. By 2026, it expects to have over 300 centers.

CVS, which also owns health insurer Aetna, is projecting more than $500 million in synergy potential over time with the acquisition, enhancing its long-term adjusted operating income growth.

“Together with CVS Health, we will have access to greater resources and capabilities to expand the reach of our platform, provide more opportunities for our teammates and, most importantly, make a meaningful difference in the lives of the patients we serve,” Oak Street CEO Mike Pykosz said in a statement.

Following the close of the transaction, Pykosz will continue to lead Oak Street, which will become part of CVS’s recently formed Health Care Delivery organization.

“Oak Street Health is a premier value-based primary care platform,” said CVS Health Chief Financial Officer Shawn M. Guertin. “We believe that in partnership with CVS Health, Oak Street Health can accelerate its growth and provide an attractive return to our shareholders over time."

Guertin added that "the pending acquisitions of Oak Street Health and Signify Health will also meaningfully advance our goal of adding 200 basis points of long-term adjusted operating income growth, a key commitment we made to shareholders at our December 2021 Investor Day.”

CVS’s co-financial advisers are Credit Suisse Securities and Lazard, and its legal advisers are Shearman & Sterling, Dechert, and McDermott Will & Emery. Centerview Partners is serving as financial adviser for Oak Street while Kirkland & Ellis is its legal adviser.