Medco to Merge With Express Scripts

Medco Health Solutions and Express Scripts announced today that the boards of directors for both companies unanimously approved a merger agreement for Express Scripts to acquire the Franklin Lakes pharmacy benefits management company for $29.1 billion.

Under terms of the deal, which is pending regulatory and shareholder approval, Medco shareholders will receive $71.36 per share in cash and stock compensation. The deal is expected to be finalized in the first half of 2012, and the combined company headquarters will be in St. Louis, the current home of Express Scripts.

“The cost and quality of healthcare is a great concern to all Americans; this is the right deal at the right time for the right reasons," said George Paz, chairman and CEO of Express Scripts. "This continues Express Scripts' commitment to strong growth, both organically and through strategic mergers and acquisitions. The opportunity with Medco represents an attractive strategic combination which will provide the opportunity to move forward with a wide array of tools and resources to accomplish our goals."

News of the merger caps off what has been a difficult year for borough-based Medco. The pharmacy giant recently reported that it lost a $3-billion contract to provide benefits for federal employees, and a $1.25-billion contract to provide prescriptions for Universal American Corp. The California Attorney General’s office and Federal Securities and Exchange Commission are also investigating details around Medco’s acquisition of a 3-year, $26-million contract to provide mail-order prescriptions to 300,000 members of the California Public Employees’ Retirement System (CalPERS) in 2004.

"We continue to have great confidence in moving forward as a stand-alone business, however, the incremental benefits of combining with Express Scripts are both logical and compelling," David Snow, chairman and CEO of Medco, said in a statement. "Our organizations represent two great success stories in American business. We have each been successful in creating shareholder value because we are both passionate about driving value to our customers through service, innovation and a focus on cost and quality. We have a shared desire to improve the way healthcare is delivered in this country and I believe this creates a strong best-of-breed foundation, culturally, for a very successful merger.

Medco corporate headquarters have been located in Franklin Lakes since the early 1990’s. More than 1,700 of its 24,000 employees are located in the borough. It is unknown at press time how the merger will impact Franklin Lakes operations.