Express Scripts Holding Co (NASDAQ:ESRX) stock was up sharply in Thursday’s premarket deals after Cigna Corporation (NYSE:CI) said it is buying its rival health insurance company in a US$54bn transaction.
The takeover offer comprises US$48.75 per share in cash, as well as stock, equivalent to 0.2434 Cigna shares for every Express Scripts share - representing a 31% premium to the Express Scripts price before the deal was announced.
David Cordani, Cigna chief executive, in a statement, said: “Cigna’s acquisition of Express Scripts brings together two complementary customer-centric services companies, well-positioned to drive greater quality and affordability for customers.”
He added: “This combination accelerates Cigna’s enterprise mission of improving the health, well-being and sense of security of those we serve, and in turn, expanding the breadth of services for our customers, partners, clients, health plans and communities.
“Together, we will create an expanded portfolio of health services, delivering greater consumer choice, closer alignment between the customer and health care provider, and more personalized value.”
Meanwhile, Express Scripts chief executive Tim Wentworth told investors that the combination “delivers attractive value” to his shareholders.
"Together, our two organizations will help make the healthiest choices the easiest choices, putting health and pharmacy services within reach of everyone we serve,” Wentworth said.
“Adding our company's leadership in pharmacy and medical benefit management, technology-powered clinical solutions, and specialized patient care model to Cigna’s track record of delivering value through innovation, we are positioned to transform healthcare.”
Express Scripts stock rose US$12.78 or 17.4% to trade at US$73.42 ahead of Thursday’s open, whereas Cigna was down US$9.50 or 4.89% at US$183.50.