The Cigna Group · NYSE:CI
The Cigna — Cigna — Merger or Acquisition (July 2018)
25 slides from The Cigna's merger presentation, Jul 30, 2018
Slide 1: Cigna to Acquire Express Scripts
Cigna TO ACQUIRE Express Scripts July 2018
Slide 2: Today's Agenda
Today’s Agenda 2 Transaction OverviewStrategic RationaleGovernance and ProcessConclusion
Slide 3: The Proposed Express Scripts Acquisition Will Grow Shareholder Value
The Proposed Express Scripts Acquisition Will Grow Shareholder Value Amidst an Increasingly Demanding Healthcare Environment 3 1 The current healthcare model is increasingly more complex and less sustainableNeed for improved affordabilityNeed for more coordinated patient care with greater personaliz
Slide 4: I. Transaction Overview
I. Transaction Overview 4
Slide 5: Cigna proactively pursued a combination with Express Scripts
Cigna proactively pursued a combination with Express Scripts to accelerate the transformation of the U.S. health care system and drive long-term value Healthcare costs are growing at unsustainable levels, while health conditions of Americans are deteriorating; managing and coordinating medical, phar
Slide 6: Summary Terms of the Combination
Summary Terms of the Combination 6 Cigna acquiring Express Scripts for ~$67 billion in a cash and stock transactionConsideration consists of $48.75 and 0.2434 shares of stock of the combined company per Express Scripts share Cigna shareholders will own ~64%; Express Scripts’ shareholders will own ~3
Slide 7: II. Strategic Rationale
II. Strategic Rationale 7
Slide 8: Healthcare costs are growing at unsustainable levels
Healthcare costs are growing at unsustainable levels Healthcare spending is projected to grow 5.6% per year, on average, over the period 2016 – 2025 – a more rapid rate than growth in GDP – and increase to 19.9% of GDP by 2025 1At the same time, the health conditions of Americans are deterioratingNe
Slide 9: Together, Cigna and Express Scripts Will Deliver Greater Affordability
9 … And Together, Cigna and Express Scripts Will Deliver Greater Affordability for Consumers and Long-term Value for Shareholders Unmanaged Care Managed Care Health Services Cigna 9 – 12% Medical trend 7 – 8% Medical trend ~5 – 6% Medical trend ~4% Medical trend Other Health Services Companies Cigna
Slide 10: Accelerates the Strategy of Both Companies and Drives Deeper Alignment
Accelerates the Strategy of Both Companies and Drives Deeper Alignment Across Critical Elements of the Healthcare System 10 PHARMACY SUPPLY CHAIN PHARMACY MANAGEMENT SERVICES HEALTH & WELLNESS SERVICES MEDICAL INSURANCE ALIGNED HEALTH CARE PROVIDERS Power of AlignmentUnrivaled Predictive Capabilitie
Slide 11: Expands Reach, Positioning the Combined Company for Sustained Growth
11 Broadens offerings for employers, health plans and government agencies Meaningfully expands geographic reach Deepens and strengthens client relationships Strengthens Medicare Advantage and Part D offerings Expands Reach, Positioning the Combined Company for Sustained Growth Deeper Geographic Reac
Slide 12: Differentiated Financial Results and Long-term Shareholder Value
Differentiated Financial Results and Long-term Shareholder Value 12 Delivers Immediate and Longer-Term Cost Savings Greater than $600 million of retained synergies expected, primarily administrativeBillions of savings for customers and clients anticipated; can fuel further growth Maintains Balance S
Slide 13: Customer-centric organizations and deep clinical abilities
Customer-centric organizationsFocus on high customer satisfaction as measured by each company’s strong net promoter scoresCombination will strengthen the patient-physician relationship with better tools and information at the point of careConsultative, data-driven client approachTakes solutions-orie
Slide 14: III. Governance and Process
III. Governance and Process 14
Slide 15: Cigna's Consideration of the Transaction Was Thorough and Deliberate
Cigna’s Consideration of the Transaction Was Thorough and Deliberate 15 Cigna’s Board and management team regularly evaluated potential strategic alternatives that might be available to Cigna, including consideration of industry and regulatory developmentsAfter the termination of the merger agreemen
Slide 16: Cigna's Board, With Management, Has a Continued Focus on Long-term Value
Joint integration team from both Cigna and Express Scripts is led by Cigna President & CEO David Cordani and Express Scripts President & CEO Tim WentworthEmploying a three-pronged approach: Culture alignment is key to the overall integration planUnderstanding the bright spots and vulnerabilitiesHave
Slide 17: The Investment Community Believes the Combination Will Drive Substantial Upside
The Investment Community Believes the Combination with Express Scripts Will Drive Substantial Upside 17 “We see meaningful opportunity around the pending ESRX deal (ESRX, $78.39, Buy) which further integrates the crucial pharmacy benefit and should provide for deeper collaborative relationships. In
Slide 18: Increased Conviction in the Transaction Closing
There Has Been Increased Conviction in the Transaction Closing as the Market Better Understands Potential Value Creation 18 The announcement surprised the marketplaceNo prior speculation of an Express Scripts transaction Investors may have been expecting Cigna to pursue a different large-scale trans
Slide 19: IV. Conclusion
IV. Conclusion 19
Slide 20: Cigna's Board Recommends a Vote FOR the Transaction
Cigna’s Board conducted an extensive review and ultimately determined that a combination with Express Scripts was the most attractive option available to Cignain order to maximize long-term value creation in the context of an accelerating transformation of the U.S. healthcare systemCigna’s Board rem
Slide 21: Appendix
Appendix 21
Slide 22: Combined Company Board of Directors
Combined Company Board of Directors 22 David M. Cordani – Director, President & CEOCEO of Cigna since December 2009; employed by Cigna since 1991Member of the Business Roundtable and serves on the U.S.-India Business Council Board of DirectorsNamed Chairman of the U.S. Chamber of Commerce’s U.S.-Kor
Slide 23: Combined Company Board of Directors (Cont'd.)
Combined Company Board of Directors (Cont’d.) 23 William J. Delaney – Independent Director of Express ScriptsFormer CEO of Sysco Corporation from March 2009 – December 2017; Former President from March 2010 – January 2016; Former EVP and CFO from July 2007 – October 2009Former director of Sysco Corp
Slide 24: Forward Looking Statements
FORWARD LOOKING STATEMENTSInformation included or incorporated by reference in this communication, and information which may be contained in other filings with the Securities and Exchange Commission (the “SEC”) and press releases or other public statements, contains or may contain forward-looking st
Slide 25: Important Information About the Transaction and Where to Find It
IMPORTANT INFORMATION ABOUT THE TRANSACTION AND WHERE TO FIND ITThis communication does not constitute an offer to sell or solicitation of an offer to buy any securities. In connection with the proposed transaction, the newly formed company which will become the holding company following the transac