Shareholders of Cigna have approved a $67 billion acquisition of Express Scripts, a pharmacy benefit manager. Roughly 90 percent of shareholders voted in favor of the deal at a special meeting of shareholders on Friday, Aug. 24.
The approval puts an end to a public dispute over the deal between Cigna, a global health service company, and activist investor Carl Icahn, who previously slammed the deal for being overpriced before dropping his fight. The transaction value includes both stock and cash values, as well as approximately $15 billion in Express Scripts debt.
"We are delighted that our fellow Cigna shareholders support our merger with Express Scripts in recognition of the combination’s significant value creation potential,” David M. Cordani, president and CEO of Cigna, said in a statement. “Together with Express Scripts, Cigna will further accelerate our strategy of Go Deeper, Go Local and Go Beyond by improving affordability and choice, expanding our distribution reach, and further strengthening predictability for customers, clients, partners and communities–all while maintaining significant financial flexibility and delivering attractive returns for our shareholders.”
Cigna anticipates the merger will close the end of 2018, pending customary closing conditions and regulatory approvals.
The acquisition is just one of a few mega-deals that have raised eyebrows among some policymakers and regulators. The Cigna-Express Scripts transaction brings together one of the nation’s major health insurance providers with a leading PBM, bridging the gap between provider and payer.
“Our combined company will enhance Cigna’s differentiated service-based model, fueled by actionable insights and analytics, to drive innovation and meaningful growth in a highly dynamic market environment,” Cordani said. “As a result, we will build more effective partnerships, further improve health outcomes and deliver a superior customer experience.”
Another high profile transaction currently underway is CVS Health’s purchase of Aetna, a health insurance provider, for $69 billion. That deal, along with Cigna’s Express Scripts transaction, have led to recent calls from Sen. Chuck Grassley, R-Iowa, to heighten scrutiny and oversight. Both deals vertically integrate major players in the healthcare market and will have significant impacts on the market–and potentially patients.
The CVS-Aetna deal has also run into opposition, including from the American Medical Association, which argued the merger would limit market competition and endanger patients, and a California regulator, who urged the U.S. Department of Justice to sue to block the transaction.