Cigna to acquire Express Scripts for $67 billion

Various medicine pills in their original packaging are seen in Ljubljana

Cigna Corp.CI has announced that it will buy Express Scripts Holding Co., ESRX a pharmacy benefits provider and other medical servcies.

Express Scripts Holding Company puts medicine within reach of tens of millions of people by aligning with plan sponsors, taking bold action and delivering patient-centered care to make better health more affordable and accessible.

"This combination accelerates Cigna's enterprise mission of improving the health, well-being and sense of security of those we serve, and in turn, expanding the breadth of services for our customers, partners, clients, health plans and communities", said Cigna president and CEO David Cordani, who will retain that role with the combined company.

Express Scripts announced that its board has approved a share repurchase program on Monday, December 18th that authorizes the company to repurchase 45,000,000 outstanding shares. After closing, Cigna shareholders would own about 64 percent of the combined company and Express Scripts shareholders would own approximately 36 percent. Last year, health insurer Anthem said it would set up its own pharmacy-benefits management unit, after earlier accusing Express Scripts of overcharging by billions of dollars. Express Scripts CEO Tim Wentworth will become the president of the Express Scripts division. (JPM) to take on America's broken health care space with an independent company that seeks to offer services to the firms' employees at a lower cost.

The move comes as St. Louis-based Express Scripts is losing its biggest client. According to today's trading volume Express Scripts Holding Company is ABOVE its 20-Day Avg. volume with the stock showing ABOVE Abnormal volume in the past 150 days.

Last year, Anthem's planned takeover of Cigna was blocked on concerns it would undermine competition, ending an nearly two-year battle to combine two of the biggest health insurers in the U.S.

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Cigna intends to fund the cash portion of the transaction through a combination of cash on hand, assumed Express Scripts debt and new debt issuance and Cigna has obtained fully committed debt financing from Morgan Stanley Senior Funding, Inc and The Bank of Tokyo-Mitsubishi UFJ Ltd. The combined company would cover the entire spectrum of care, providing a suite of medical, behavioral, specialty pharmacy and other health engagement services, they said.

The transaction is not subject to any financing conditions.

That deal is sure to get scrutiny: Regulators have blocked some of the industry's biggest mergers, including one proposed by Cigna and Anthem Inc. and another attempted by Aetna and Humana Inc.

Cigna served 15.9 million customers in 2017 while reporting 2017 revenue of $41.6 billion and profit of $2.2 billion. Finally, Zacks Investment Research downgraded Express Scripts from a "buy" rating to a "hold" rating in a research note on Friday, March 2nd.

The companies expect the deal to close by the end of 2018. It operates in two segments: PBM and Emerging Markets (EM).

Centerview Partners LLC and Lazard Frres & Co LLC are acting as financial advisors, while Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel and Holland & Knight LLP as regulatory counsel to Express Scripts.

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