Expess Scripts Inc. (ESRX) said it completed its $29.1 billion
acquisition of Medco Health Solutions Inc. (MHS) following a
Federal Trade Commission decision that the combination of the two
largest pharmacy-benefits management companies in the U.S. wouldn't
change the competitive landscape in the sector.
The FTC in a majority vote of 3-1 determined that the deal
wouldn't change dynamics in the PBM market, ending an eight-month
investigation. In a statement the panel said its probe found a
"competitive market for PBM services characterized by numerous,
vigorous competitors who are expanding and winning business from
traditional market leaders."
The probe also showed that Express Scripts and Medco "are not
particularly close competitors, the market today is not conducive
to coordinated interaction, and there is little risk of the merged
company exercising monopoly power," the FTC said.
In a dissenting opinion, FTC Commissioner Julie Brill called the
merger "a game changer" and stated, "I have reason to believe that
this merger is, in fact, a merger to duopoly with few efficiencies
in a market with high entry barriers--something no court has ever
approved."
Brill called on the commission to conduct a retrospective study
on the merger in three years' time.
Express Scripts shares closed Friday at $54.18 and were halted
premarket.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com