Express Scripts to snap up Medco in $29.1 bn deal

In one of the biggest deals in American pharmacy services space, Express Scripts will snap up rival Medco Health Solutions in a $29.1 billion cash and stock deal.

Express Scripts and Medco are leading US pharmacy benefit managers, entities which help in offering prescription drugs at lesser prices through employers and government, among others.

Both entities today said they had entered into a definitive agreement for the proposed transaction, which was expected to close in the first half of 2012.

Under the agreement, Medco shareholders would receive $71.36 per share in cash and stock, valuing the deal at $29.1 billion, based on yesterday's closing price.

"Medco shareholders will receive $28.80 in cash and 0.81 shares for each Medco share they own upon closing of the transaction," the firms said in a joint statement.

The deal would be one of the biggest in pharmacy services segment, which last saw the big ticket transaction worth over $21 billion between CVS and Caremark in 2007.

"The merger will combine expertise of two complementary pharmacy benefit managers [PBMs] to accelerate efforts to lower the cost of prescription drugs and improve the quality of care for Americans," the statement noted.

Pharmacy benefit management (PBM) business is highly competitive, especially with the presence of retail pharmacy, managed care, independent and specialised entities.

"The merger with Medco will accelerate our efforts to create greater efficiencies in health care system and better protect American families from rising costs of prescription medicine while improving health outcomes," Express Scripts Chairman and CEO George Paz said.