Two of the nation's largest pharmacy benefits management companies could become one in the first six months of next year.

The $29.1 billion merger between St. Louis-based Express Scripts and and Medco Health Solutions, based in New Jersey, still needs approval from both shareholders and regulators. The boards of both companies approved the merger on Thursday.

If approved, the company, which would retain the Express Scripts name and headquarters, would be the largest of its kind in the country. Together, Express Scripts and Medco handled 1.7 billion prescriptions in 2010, and generated more than $110 billion in revenue.

The size, said Express Scripts' chief spokesman Larry Zarin, would give the new company an edge on reducing health care costs, which he says is a priority of the nation as well as the corporation.

"Where we are with health care costs, where we are with health care reform, the size of that challenge and the absolute call for new, innovative solutions, both structurally and tactically, and we're going to take on both," he said.

The companies say they have identified $1 billion in potential savings by streamlining areas like the supply chain and research and development.

But Zarin ducked questions about possible layoffs.

"Today is not the day to talk about that," he said. "Today is the day to look forward. "We're going to take a very thoughtful approach to the integration, a very thoughtful approach in terms of structuring the organization in the best way, and we're not really going to take a look at head count today."

Medco has 20,000 employees - Express Scripts has about 13,000.

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