Health insurer Cigna Corp. (CI) announced that it has agreed to acquire U.S.-based pharmacy benefit manager (PBM) company Express Scripts (ESRX) for a total consideration of $67 billion in an all cash, all stock deal. The $54 billion acquisition - including $13 billion in assumed debt of Express Scripts -represents a 30%+ premium over Express Scripts' closing share price before the day of the announcement.
Cigna and Express Scripts said that the combined company would lower costs for corporate clients by giving them more coordination between medical care and pharmacy benefits, particularly for specialty drugs. In addition, the combined company expects to achieve $600 million in annual savings. Following the announcement, Cigna's investors reacted sharply as the share price slid down 11% from its previous close, while Express Scripts shares jumped 8% (still well below the offer price).
