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Cigna to acquire Express Scripts in $67B deal

Confirming a report, Cigna Corp. has agreed to acquire pharmacy benefit manager Express Scripts Holding Co. in a deal valued at approximately $67 billion, including Cigna's assumption of approximately $15 billion in Express Scripts' debt.

The merger consideration will consist of $48.75 in cash and 0.2434 shares of stock of the combined company per Express Scripts share.

The combined company will be led by David Cordani as president and CEO, while Tim Wentworth will become president of Express Scripts. The combined company will be named Cigna, and its board will be expanded to 13 directors, including four independent members of the Express Scripts board.

Cigna's headquarters in Bloomfield, Conn., will become the headquarters for the combined company, and Express Scripts will be headquartered in St. Louis, Mo. The combined company will additionally invest "$200 million in its charitable foundation, to support the communities in which it operates, and with the continued focus on improving societal health."

The transaction is expected to be completed by Dec. 31, subject to the approval of Cigna and Express Scripts shareholders and regulatory approvals. Until the deal closes, Cigna and Express Scripts will continue to operate as independent entities.

Cigna plans to fund the cash portion of the deal consideration through a combination of cash on hand, assumed Express Scripts debt and new debt issuance. The company said it has obtained committed debt financing from Morgan Stanley Senior Funding Inc. and the Bank of Tokyo-Mitsubishi UFJ Ltd. The transaction is not subject to a financing condition. When the deal closes, Cigna is expected to have debt of approximately $41.1 billion and a debt-to-capitalization ratio of approximately 49%, but it aims to achieve a ratio in the 30's within 18 to 24 months after the transaction closes. Cigna expects to maintain its investment grade ratings.

Morgan Stanley & Co. LLC is acting as sole financial adviser, Wachtell Lipton Rosen & Katz is serving as legal counsel and Paul Weiss Rifkind Wharton & Garrison LLP is serving as regulatory counsel to Cigna. Centerview Partners LLC and Lazard Frères & Co. LLC are acting as financial advisers, Skadden Arps Slate Meagher & Flom LLP is serving as legal counsel and Holland & Knight LLP is serving as regulatory counsel to Express Scripts.