Cigna to buy Express Scripts for $67B

Cigna announced this morning it will buy Express Scripts in a deal worth a total of $67 billion. The health insurer will assume $15 billion in debt from the pharmacy benefits manager (PBM) in addition to the $52 billion stock-and-cash transaction.

“When we think about Express Scripts, it has PBM capabilities, but it has 27,000 individuals and a significant number of consumer touchpoints around health and well-being,” Cigna CEO David Cordani said in a Wall Street Journal interview. “It expands our service portfolio beyond that of a PBM.”

Cigna agreed to pay $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—a premium of nearly 31 percent to Express Scripts' March 7 closing price.Top of Form

The Cigna-Express deal is the latest massive acquisition in a healthcare market that has seen significant consolidation in recent years. The latest move comes three months after CVS agreed to buy Aetna for $69 billion. Both deals are efforts to control costs, in part by increasing leverage when negotiating with pharmaceutical companies.

Along those lines, the January initiative from Amazon, Berkshire Hathaway and JPMorgan Chase appeared to some as a threat that outside corporations were examining possible entry into healthcare.

Cigna and Express Scripts have both approved the deal. While it must receive regulatory and shareholder approval, the transaction should be completed by the end of 2018.