Express Scripts may close Medco deal next week
NEW YORK (AP) — Shares of Express Scripts Inc. and Medco Health Solutions Inc. jumped Wednesday after the pharmacy benefits managers said their $29.1 billion combination could close as soon as next week.
Express Scripts, which announced its plan to buy Medco last July, had said recently it expected the deal to close early in the second quarter. Shareholders from both companies have already approved the acquisition, but the Federal Trade Commission is still reviewing it.
Express Scripts spokesman Brian Henry declined to comment Wednesday on whether his company's announcement means regulatory approval of the deal is likely. He said discussions with the FTC are private.
Pharmacy benefits managers, or PBMs, run prescription drug plans for employers, government agencies and other clients, using their large purchasing power to negotiate lower drug prices. They make money by reducing costs for health plan sponsors and members.
In July, Express Scripts of St. Louis announced its plan to offer $28.80 in cash and a portion of an Express Scripts share valued at $42.56 for each share of Medco, based in Franklin Lakes, N.J. Shareholders for both companies have approved the deal, and Express Scripts and Medco have touted the savings and efficiency that the combination would create.
The FTC has been reviewing the transaction for several months and has asked the companies for more information. The potential deal has stirred concern about competition.
The combined company would become the largest U.S. PBM by far. It would handle the prescriptions of about 135 million people, or more than one in three Americans.
Shares of Express Scripts climbed about 2.8 percent, or $1.50, to $54.71 in morning trading, while Medco jumped 4.2 percent, or $2.92, to $71.91.
Meanwhile, the Standard & Poor's 500 index fell slightly.