Express Scripts to Buy Medco in $29.1 Billion Deal

Express Scripts says it plans to buy Medco in a $29 billion deal that unites two of the nation's largest pharmacy benefits management companies.

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Express Scripts Inc. agreed to buy Medco Health Solutions Inc. for $29.1 billion in cash and stock today, in a move that would unite two of the largest prescription drug management companies in the United States.

The deal, which is the second biggest merger of 2011, was first reported early this morning by the Wall Street Journal.

Express Scripts Chief Executive George Paz said the move made sense given all the changes that are expected in the industry amid health-care reform legislation.

"The cost and quality of health care is a great concern to all Americans; this is the right deal at the right time for the right reasons," Paz said, according to the Journal. He anticipates that the “estimated synergies” of the two companies (read: they’ll be layoffs and other cuts at both companies) will reap about $1 billion in cost savings.

The new company will be headquartered in St. Louis, the current home of Express Scripts. Its competitors will include CVS Caremark, and UnitedHealth Group’s Optum health-services unit. Express Scripts unsuccessfully battled CVS for CareMark Rx and lost its buyout attempt four years ago, in part because of antitrust concerns.

The Express Scripts-Medco merger will be eyeballed by government regulators of course, who are already pondering the year’s biggest merger, which is AT&T’s acquisition of T-Mobile, a $39 billion deal.

The merger is expected to close in the first half of next year, pending regulatory and shareholder approval, the New York Times reports.

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