The comapnies said this morning that they’ve entered into a definitive agreement in which Cigna will buy Express Scripts in a cash and stock transaction valued at $67 billion in cash and stock. As part of the deal, Cigna will assume around $15 billion in Express Scripts’ debt.
In total, Express Scripts shareholders will receive $48.75 in cash, along with 0.2434 shares of stock of the combined company, for each Express Scripts share they own. The transaction was approved by the board of directors of each company, but must still pass the customary shareholder and regulatory approvals as well.
Once the deal closes, the newly combined entity will be led by current Cigna CEO David M. Cordani, while ESRX chief executive Tim Wentworth will remain onboard and serve as President, Express Scripts. The combined company’s board of directors will expand to 13 people, including four from Express Scripts’ board.
Cigna noted the deal should deliver first year double digit earnings per share (EPS) accretion, while enhancing its revenue and earnings growth as well.
The transaction is expected to be completed by the end of 2018.
CIGNA Corporation shares fell $9.75 (-5.02%) in premarket trading Thursday. Year-to-date, CI has declined -4.35%, versus a 2.22% rise in the benchmark S&P 500 index during the same period.