Even on today dificult situations, there are some business which is not affected by trouble created by financial institutions around the world. Some industries can strive to any trouble water and even come out stronger than before. I think the health industries is one of the industries. My thinking cannot be more correct since today I heard an impresive news about Medco Health Solutions and Express Scripts.
It is reported on some big media that in a deal that appears likely to prompt significant regulatory scrutiny, Express Scripts has agreed to pay $29.1 billion to buy Medco Health Solutions, one of its biggest rivals in the behind-the-scenes world of pharmacy benefits management. Some experts already said that by joining forces, Express Scripts and Medco will become the largest Pharmacy Benefits Management (PBM), with nearly a third of the market. They aim to leverage their newfound heft to lower the cost of prescription drugs—indicating more pressure on pharmaceutical companies at a time they’re already facing the loss of patent protection for top products.
For those interested in dollars and cents, Medco shareholders will receive $71.36 per share in cash and stock or, put another way, $28.80 in cash and 0.81 shares for each Medco share they own.
Express Scripts Inc.’s agreement to buy Medco Health Solutions Inc. for $29.1 billion in cash and stock links together two of the nation’s largest pharmacy-benefit managers at a time one of them faces losing its biggest customer.
After the deal is done, Express Scripts shareholders will own about 59 percent of the combined company. The merger with Medco will accelerate our efforts to create greater efficiencies in the healthcare system and better protect American families from the rising costs of prescription medicine while improving health outcomes.”
As for cost savings, Paz estimates the deal can cut about $1 billion in expenses, or roughly 1 percent of the expenses of the combined companies. Express Scripts employed 13,170 people, but only 6 percent are represented by unions.
As a result of the transactions, Medco Health Solutions Inc. (MHS) stocks surged 15 percent to $63.07 for the biggest gain in the S&P 500. As already mentioned above Express Scripts Inc. (ESRX) agreed to buy the pharmacy benefits manager for $71.36 a share in cash and stock, representing a 28 percent premium to Medco’s closing share price yesterday. On other side, Express Scripts shares climbed 6.1 percent to $55.72.