logo
Share SHARE
FONT-SIZE Plus   Neg

Express Scripts Gets FTC Approval, Closes $29 Bln. Medco Health Acquisition

Pharmacy benefit manager Express Scripts Inc. (ESRX), Monday completed its $29.1 billion acquisition of Medco Health Solutions Inc. (MHS), after getting the nod from US Federal Trade Commission.

The FTC commissioners voted 3-1 in favor of the merger after reaching a conclusion that the acquisition of Medco by Express Scripts will not change the dynamics in the pharmacy benefit manager (PBM) industry.

On July 21, 2011, Express Scripts agreed to buy Medco Health Solutions for $28.80 in cash plus 0.81 Express Scripts share for each Medco share held. The companies expect the deal to be slightly accretive to earnings, excluding integration and deal-related costs, in the first full year after closing and moderately accretive once fully integrated.

FTC in a statement said, "The commissioners investigation revealed a competitive market for PBM services characterized by numerous, vigorous competitors who are expanding and winning business from traditional market leaders."

FTC also said its investigation revealed that "the merging parties are not particularly close competitors, the market today is not conducive to coordinated interaction, and there is little risk of the merged company exercising monopsony power."

Meanwhile, Julie Brill, the FTC commissioner who dissented, said the $29 billion merger between two of the largest three PBM providers is a "game changer" in the industry and believes the merger to be "a merger-to-duopoly". "This merger will create a highly concentrated market that should be presumed to be likely to enhance market power," she said.

Commissioner Brill has also called on the FTC to conduct a thorough analysis of the industry three years from now to determine "if prices to employers in fact have gone down."

Express Scripts Chief Executive George Paz said, "Our merger is exactly what the country needs now. It represents the next chapter of our mission to lower costs, drive out waste in healthcare and improve patient health."

ESRX is currently trading on the Nasdaq at $56.01, up 3.40%, on a volume of 17.7 million shares, above the three-month average volume of 8.8 million.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Apple Inc. has confirmed that the iPhone 6s battery issue may be larger than thought, as the tech giant said that some customers "outside the affected range of devices" have also reported unexpected shutdowns. The company again stressed that it is not a security issue. Tesla Motors Inc. voluntarily recalled more than 7000 charging adapters. The company said these adapters of Nema 14-30, 10-30 and 6-50 are sold separately as accessories. Earlier in November, two customers had complained about overheating issue of Nema 14-30 charging adapters. Tesla confirmed in its recall communication that there were no other similar incidents or reports of injuries or proper Sony announced Project Field, a new play way to bring card games to life, along with a host of smartphone games at an event in Japan, aiming to accelerate mobile drive. Project Field is a Japan-only card collection platform where actual physical cards will work with a smartphone app. The first title to be announced is based on Yo-kai Watch for mobile. There is no news about an international releas
comments powered by Disqus
Follow RTT