Cigna Corp. and Express Scripts shareholders on Friday approved the insurer’s $60 billion acquisition of the pharmacy benefit manager, following a top activist investor’s decision to drop his opposition to the transaction.
Regulatory approval for the deal remains pending, but the companies expect it to close by the end of 2018.
“Our combined company will enhance Cigna’s differentiated service-based model, fueled by actionable insights and analytics, to drive innovation and meaningful growth in a highly dynamic market environment,” David Cordani, the insurer’s top executive, said in a statement. “As a result, we will build more effective partnerships, further improve health outcomes and deliver a superior customer experience.”
[Also read: Cigna posts revenue growth as concerns rise over merger with Express Scripts]
The two companies cleared a key hurdle after 78 percent of Express Script investors and 90 percent of Cigna shareholders voted in favor of the transaction. Activist investor Carl Icahn previously said he would try to block the deal over concerns that Cigna was overpaying for Express Scripts amid heightened scrutiny over the pharmacy benefit manager business model. He later reversed that opposition.
“Together, we will transform healthcare by combining two innovative healthcare services companies that will have the capabilities, financial flexibility, reach and expansion opportunities to create significant and immediate value for clients and stockholders,” Tim Wentworth, chief executive officer at Express Scripts, said in a statement.
The decision by investors to allow the deal to advance comes amid a period of transformation for the healthcare industry.
CVS Health and Aetna are in the midst of obtaining regulatory approval for their own merger, a transaction that would lead to further consolidation between pharmacy benefit managers and insurers. Amazon also recently purchased PillPack, a move that will allow the e-commerce giant to enter the pharmacy business as the Trump administration advances its blueprint to lower drug costs.
