St. Louis based Express Scripts is in the process of consolidating with Cigna. Even though this merger, along with various others around the city in recent years, might lead to some anxiety, there’s no need for residents to panic. Don’t forget that St. Louis continues to lead in financial services, healthcare and is often considered a world leader in agriscience with a number of successful startups still growing around the city.
Consolidation is Happening Everywhere
The merger is being attributed in part to the growing national trend depicting a decline in public companies. Deals like this are becoming more common as firms across the U.S. continue to either avoid or withdraw from public status for a variety of reasons that make their businesses stronger. Here’re some statistics depicting this trend as were reported by the Public Broadcasting Service:
- Every year between 1996 and 2012 saw a decrease in the number of exchange-listed firms.
- The total number fell from 8,000 to 4,100 over this period, while the rest of the world saw an increase from 30,700 to 39,400.
Acquisition Could Stimulate Local Workforce
It’s also predicted to save the companies $600 million in costs related to administrative efficiencies as costs are cut and pharmacy and medical claims become strategically coordinated. Cigna president and CEO David Cordani issued the following statement: “We will make a significant commitment to that community. Cigna’s acquisition of Express Scripts brings together two complementary customer-centric services companies, well-positioned to drive greater quality and affordability for customers.” He also pointed out that other similar acquisitions resulted in local workforce growth. Although the acquisition requires approval by both Cigna and Express Scripts shareholders, it’s expected to be finalized by the end of the year.
Some other potential benefits of this deal are that it would expand choices, simplify health care and better align incentives to pay for and provide care that keeps people healthy.
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