Big Drug Deal
And no, this isn’t a deal behind a warehouse for an illegal substance. A merger between CVS Corp. and Caremark RX can continue to move forward today after an announcement by Caremark RX that it would discontinue its dealings with Express Scripts.
According to a story on MSN.com, “Express Scripts will move forward with the .2 billion all-stock bid by CVS made Nov. 1. Caremark said Express Scripts' higher offer included "questionable assumptions" on its cost-savings calculations and "would result in a highly leveraged and weakened business."
Caremark’s board was apparently concerned about anti-trust issues between the combining of the 2nd and 3rd largest prescription drug managers in the United States. As expected, shares of all three companies were down around 1%.
The Caremark/CVS merger has already been cleared of any anti-trust issues and the companies expect to close the transaction by the end of the first quarter of 2007. If the deal goes through between CVS and Caremark RX, they would be responsible for shipping more than one quarter of all prescription medication in the United States.
The Nashville Business Journal Reports, “In yesterday's statement from Caremark, the company states it "remains convinced that its pending combination with CVS will define and lead the next evolution of the pharmaceutical services industry, providing substantial strategic and financial benefits." New and innovative programs and better consumer access and choice are sited as reasons the Caremark/CVS deal is attractive.”
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