Cigna Corp. likely to acquire Express Scripts for over $50 billion

The United States based health insurance firm Cigna Corporation has apparently declared its intention to buy Express Scripts Holding Company. The largest pharmacy benefit firm in the U.S. is likely to be sold out for a valuation of around USD 54 billion in a cash & stock agreement.

As per medical industry experts, this strategic decision is aimed at reducing the rising healthcare expenditure and improving Cigna’s product & service offering across the healthcare sector. For the record, Cigna’s offer includes USD 48.75 in cash and 0.2434 shares of stock of the combined entity for every share of Express Scripts. It amounts to nearly USD 96.03 per share, which displays a premium of about 31% to the closing market price of Express.

Reports cite that the announcement of the purchase deal between Cigna & Express follows right after the USD 69 billion merger of the U.S. based health insurance firm Aetna Inc. with CVS Health Corporation, a U.S. retail pharmacy & healthcare firm. The mergers & acquisition deals taking place across the healthcare sector display a shift toward major consolidation, claim experts. Elaborating further, they say that these transactions between medical magnates will help bring pharmacy & medical claims under one roof and enhance preventative measures across the hospitals.

After the finalization of the agreement, Cigna Inc.’s investors will possess the ownership of nearly 64% of the shares of the joint entity, while the stakeholders of Express Scripts will own the remaining shares. The key officials of Cigna have announced that the firm is likely to fund the cash for the agreement through Express Scripts’ outstanding debts, new debt issuances, and cash on hand.

As per the company sources, it has already received complete debt financing from The Bank of Tokyo-Mitsubishi UFJ Limited and Morgan Stanley Senior Funding. Incidentally, the deal is valued at a total of USD 67 billion, including close to USD 15 billion in Express Scripts' debts.

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Dhananjay Punekar

Dhananjay develops content for Market Size Forecasters. A post graduate in mathematics as well as business administration, he worked as a process executive in Infosys BPO Limited before switching his professional genre. Following his childhood passion, he opted for a career in writing and now pens d...

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