The $29.1 billion merger between Express Scripts Inc. (NASDAQ: ESRX) and Medco Health Solutions Inc. has been cleared by the Federal Trade Commission (FTC) and the companies have announced that the completion of the merger. The merger was allowed on a 3-1 vote of the FTC.
It appears that the FTC bought the argument from Express Scripts and Medco that the combined company would have more clout with pharmacies and drug makers to reduce prices to consumers. Critics argued that allowing the merger would reduce competition and drive up costs to consumers.
In a dissenting opinion, commissioner Julie Brill argued that no court has ever approved a merger that created a “duopoly” in a market and that the merger should have been enjoined and gone to trial in federal court. Caremark CVS Corp. (NYSE: CVS) is the other large pharmacy benefits management firm Brill referred to as part of the duopoly.
Express Scripts shares are up about 4.9% shortly after opening this morning at $56.81 in a 52-week range of $34.47-$60.89.
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