Express Scripts, Medco Continue To Work With FTC On Deal
March 12 2012 - 6:15PM
Dow Jones News
Pharmacy-benefit managers Express Scripts Inc. (ESRX) and Medco
Health Solutions Inc. (MHS) said they are working with the Federal
Trade Commission to secure approval for their planned deal, which
could close within a matter of weeks.
Express Scripts is planning to buy Medco--in a cash-and-stock
deal valued at $29 billion when it was announced in July--to create
the industry's biggest firm. Pharmacy-benefit managers, or PBMs,
handle drug benefits for corporations and health plans.
The companies certified on Feb. 10 that they had complied with
the FTC's requests, setting a 30-day clock for the agency to
complete its antitrust review, unless the parties agreed to allow
more time. While that clock expired Monday, the two PBMS said they
have agreed with the FTC not to close the deal yet.
"Medco and Express Scripts continue to work with the FTC and
expect that the mergers will be completed by the earlier part of
the second quarter of 2012," the companies said in filings with the
Securities and Exchange Commission, made late Monday.
Express Scripts shares climbed 1.5% to $54.25 in after-hours
trading, while Medco shares rose 0.6% to $68.75. The spread between
the planned purchase price and Medco's stock has narrowed in recent
days--it was about 5.5% after Monday's close--amid signs the deal
could be closer to gaining approval.
Several trade groups and consumer advocates have urged the FTC
to block the deal. But The Wall Street Journal reported Friday that
the agency appears increasingly unlikely to do so. The FTC still
has some concerns about the combination, and talks were under way
to resolve them, the WSJ reported, citing people familiar with the
matter.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com
--Brent Kendall contributed to this article.
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