Original story from 03/08/18; updated with audio from St. Louis on the Air segment on 03/09/18.
Updated at 5 p.m., with comments from an industry analyst — Health insurance giant Cigna has agreed to purchase the St. Louis-based pharmacy benefit manager Express Scripts.
The deal, which has already been approved by the boards of both companies, is worth about $67 billion, according to press releases.
The company will be called Cigna, with its international headquarters in Bloomington, Connecticut. Express Scripts will keep its headquarters in north St. Louis County. Express Scripts employs 28,000 people worldwide, including about 5,000 workers in the St. Louis area.
Executives with both companies praised the deal, which they hope to complete by the end of the year.
“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,” said Cigna president and CEO David Cordani, who will retain that role with the combined company.
Express Scripts president and CEO Tim Wentworth, who will remain president of the pharmacy benefit manager, said the combined company was “positioned to transform health care.”
“Together, our two organizations will help make the healthiest choices the easiest choices, putting health and pharmacy services within reach of everyone we serve,” he said.
Last year, CVS announced that it would purchase Aetna, one of the largest health insurance companies in the nation. In January, Amazon announced it would work with J.P. Morgan and Berkshire Hathaway to create its own health-care company.
Express Scripts likely will retain a strong presence in the St. Louis region, said Brian Tanquilut, a health-care stock analyst for Jefferies, a global investment banking firm.
“They have the head offices there, obviously; they have some mail facilities there, they have some call centers in the area,” Tanquilut said. “I think those are operations that I think will need to remain in St. Louis.”
But such mergers, which are common in the health-care industry, can lead to job cuts, Tanquilut said. “There has been a wave of mergers aimed at improving care quality, changing the way we deliver health care,” he said. “You have an insurance plan in Cigna that sees an opportunity to control their drug costs better and offer more services to their clients.”
Recent health-care tie-ups have faced intense regulatory review. In 2016, the U.S. Department of Justice sued to block a proposed merger between Cigna and Anthem, and one between Aetna and Humana.