ST. LOUIS — Health services insurer Cigna Corporation entered into a definitive agreement with Express Scripts early Thursday morning with a cash-and-stock deal worth $67 billion.
In a press release issued by Cigna, the insurer said the deal will assume approximately $15 billion worth of Express Script's debt. Additionally, the merger consideration will consist of $8.75 in cash and 0.2434 shares of stock of the combined companies. Cigna said the merger is expected to be finalized by December 31, 2018.
The Wall Street Journal first reported the deal late Wednesday night, initially estimating the now-proposed deal worth $50 billion.
“Cigna’s acquisition of Express Scripts brings together two complementary customer-centric services companies, well-positioned to drive greater quality and affordability for customers,” said David M. Cordani, President and Chief Executive Officer of Cigna in a statement.
“First and foremost, we believe this transaction delivers attractive value to the Express Scripts shareholders" said Tim Wentworth, President and Chief Executive Officer of Express Scripts in a statement. "Together, our two organizations will help make the healthiest choices the easiest choices, putting health and pharmacy services within reach of everyone we serve.
"We will continue to have a distinct focus at Express Scripts and eviCore on partnering with health plans, and together, build tailored solutions for health plans and their members. Importantly, this agreement is a testament to the work of our team and their resolute focus on providing the best care to patients, and the most value to clients, continued Wentworth.
“In the short run you’re unlikely to see any change. In the longer run, they will attempt to have cost cutting, cost savings, and where there are some duplication in services,” said Juli Niemann, a financial analyst at Smith, Moore and Company.
When asked about whether this merger would lower pharmaceutical costs Niemann said, “I would not expect to see any meaningful changes in prices for some time to come. We’ve been told this by many other mergers and acquisitions and we’ve yet to see any meaningful, any small decrease in the price of pharmaceuticals in the United States.”
Express Scripts, with headquarters in north St. Louis County near St. Louis Lambert International Airport, had a market value of $41.43 billion as of Wednesday. Express Scripts told 5 On Your Side the headquarters will remain in St. Louis.
