NACD - National Association of Corporate Directors

Health Insurer Cigna to Buy Express Scripts in $67 Billion Deal

U.S. health insurer Cigna announced early Thursday that it has agreed to purchase pharmacy benefit manager Express Scripts in a $67 billion cash-and-stock deal, including the assumption of about $15 billion in debt, confirms CNBC News (March 8). "Cigna's offer consists of $48.75 in cash and 0.2434 shares of stock of the combined company for each Express Scripts share, amounting to $96.03 per share," notes CNBC. The offer represents a nearly 31 percent premium to Express Scripts' Wednesday closing price of $73.42. A deal between the two companies would follow the $69 billion acquisition of health insurer Aetna by drugstore chain CVS Health. In addition, it would reflect a move toward vertical consolidation where members of a supply chain combine. According to CNBC, "healthcare payers and pharmacies are responding to a shifting landscape, including changes in the U.S. Affordable Care Act, rising drug prices and the threat of competition from online retailers such as Amazon.com."

The Wall Street Journal (March 8, Mattioli, Cimilluca) adds that St. Louis-based Express Scripts ranks as the largest administrator of prescription-drug benefits in the United States. Its marquee clients range from Walmart Inc. to the U.S. Defense Department. For its part, Cigna is known for its focus on administering coverage for major employers, along with a burgeoning overseas presence. With its 2012 acquisition of HealthSpring, Cigna also bolstered its Medicare business," notes the newspaper.

Bloomberg (March 8, Ha) further points out that the mega-deal comes as Express Scripts is losing its biggest client. In 2017, health insurer Anthem announced it