United States healthcare


Cigna to acquire Express Scripts for US$52bn

March 13th 2018 | United States | Spending | Multiple companies

On March 8th Cigna Corp said that it had agreed to acquire Express Scripts Holding Co, a US-based pharmacy benefit manager, in a US$52bn deal. Including about US$15bn in debt, the transaction is valued at around US$67bn. 

Express Scripts is a third-party administrator between consumers and the healthcare system. The combined company will offer an expanded portfolio of healthcare services that will include Cigna's health insurance plans and Express Scripts' expertise in processing prescriptions and operating mail-order pharmacies. The acquisition will allow Cigna to monitor its drug prescriptions, helping it to bring down healthcare costs for corporate clients by offering better coordination between medical care and pharmacy benefits.

Cigna said that it would own a 64% interest in the combined company, while Express Scripts will keep the remaining 36%. The merged entity will be led by Cigna's head, David Cordani. The deal will be financed through a combination of debt and cash on hand. The US health insurer expects the transaction to close by the end of 2019 and leave it with about US$41bn in debt.

The deal is the latest in an ongoing consolidation in the US healthcare industry. CVS Health, a US drugstore chain, agreed to acquire Aetna Inc, another US health insurer, for US$69bn in December 2017. Later that month, Cigna's larger rival, UnitedHealth Group, agreed to buy the physician-network business of DaVita Inc for US$4.9bn.

Source: The Economist Intelligence Unit