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Cigna Gets Merger Nod, Forms Management for Unified Entity

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Cigna Corp. (CI - Free Report) announced about the enterprise leadership team for the merged company, which would be formed with the merger of Cigna and Express Scripts Holding Company (ESRX - Free Report) .

The formation of this team follows the recent receipt of approval for the deal from the Department of Justice (DoJ), which marked a significant step toward the closure of the deal slated for the year end.

Cigna’s CEO and president, David Cordani is now busy with the development of the new entity and formation of the leadership team is an initial step toward the same.

With the newly formed leadership team — including David Cordani along with president and chief executive officer of Express Scripts Tim Wentworth and other veteran leaders — will drive affordability, choice, and quality for customers and clients; and will result in sustained and attractive return for shareholders.

Upon closing, the combined company will offer multiple growth platforms, a commercial business, including employer-sponsored medical coverage;  government business, including Medicare offerings to seniors; an international business, including global supplemental benefits and, a health services business, including Express Scripts.

Cigna expects adjusted EPS in 2019 to gain in double digits (this excludes any impact of transitioning of clients by Express Scripts, specially Anthem). By 2021, Cigna projects adjusted EPS of $20-$21, of which $2-$3 is likely to come from Express Scripts.

Another deal, which is awaiting approval from the regulators, is that of Aetna Inc. and CVS Health Corp. (CVS - Free Report) .

These deals between a health insurer and a pharmacy benefit manager will transform the health care space into a more integrated one, with companies building their backward and forward chains. This is likely to help companies to carve drug pricing to some extent, which is one of the biggest reasons behind soaring medical costs. It is also expected to aid pharmacy benefit managers to counter competition that is to be posed by the entry of Amazon in the healthcare space.

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