In March, Cigna announced it would buy the world’s largest pharmacy benefits manager, Express Scripts, for $52B in cash and stock.
According to new company figures, as of yesterday, Cigna and Express Scripts have collectively spent $201m on lawyers and bankers tied to the pending merger (valued at $67B, including debt).
It may not even happen
Cigna has had a doozy of a time with takeovers, as it looks to pre-emptively compete with companies like Amazon, which has toyed with the healthcare biz in the past.
Last year, antitrust regulators blocked Cigna’s attempt to buy Anthem for $48B, and in August, Express’ stock fell 6% after Carl Icahn bought 5% of the company and expressed interest in blocking Cigna’s takeover.
And they’re not the only ones who have fallen victim to merger fees
After AT&T won its long, drawn out fight with the DoJ to take over Time Warner Inc. for $85B, victory too came with massive expenses.
Last year, the WSJ reported the service provider spent $1.1B on debt interest and fees linked to the proposed merger, plus another $214m on added integration costs, totaling $279m spent on the merger in 2017 — and that’s not even counting the cost of lawyer fees.
The bottom line is, the longer these transactions take, the less of a win it becomes… for everyone.
