(Updated with comment from a company conference call.)Express Scripts said it will acquire Medco Health Solutions, a rival pharmacy benefits management company, for $29.1 billion in cash and stock.
St. Louis-based Express Scripts will form the Express Scripts Holding Co.; Express Scripts shareholders will own 59% of the new company while Medco shareholders will own about 41%, according to a news release. Medco, which is based in Franklin Lakes, N.J., has 20,000 employees and reported $66 billion in revenue in 2010.
“We have always been opportunistic in looking for ways to enhance value and today's announcement of our combination with Medco is a perfect example,” said George Paz, chairman and CEO of Express Scripts, during a conference call.
Paz will serve as chairman and CEO of the newly formed holding company, which will be based in St. Louis.
The boards at both companies unanimously approved the definitive merger agreement. Express Scripts and Medco said in the news release they expect the pharmacy benefit management business to remain competitive. During the call, Paz cited healthcare reform and the number of brand-name drugs facing the loss of patent exclusivity as events that will affect the PBM industry.
“We have never been better positioned to take advantage of long-term growth opportunities inherent in the PBM marketplace,” he said.
The deal is expected to close in the first half of 2012, pending regulatory approval.
