DealBook Briefing: What Cigna’s Big Deal Reveals About Health Care

Good Thursday morning. Cigna struck a big deal for Express Scripts. The White House plans to unveil its tariffs today. And protesters want Visa to stop processing sales of assault-style rifles. Note to readers: Some links in this newsletter require subscriptions.

Cigna finally got a big deal done by buying Express Scripts, one of the U.S.’s largest drug benefits managers, for $67 billion, including debt.

The bigger point: as always, health care companies want to get bigger and gain negotiating leverage, while branching out into different businesses.

The details: The insurer agreed to pay $48.75 a share in cash and 0.2434 of a newly issued share for each Express Scripts share. That’s about $96.03 as of yesterday’s close, a roughly 30 percent premium to Express Scripts’ closing price.

The context: Cigna’s planned sale to Anthem finally collapsed last year, as did Humana’s sale to Aetna, which was then acquired by CVS.


Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Amie Tsang in London.


The White House is hoping to formalize its tariffs on imported aluminum and steel this afternoon — but the plan has lots of moving parts. Canada and Mexico, and perhaps other allies, may be initially exempt.

The administration may also take more swings at China, including tariffs on more imports. Meanwhile, China’s foreign minister, Wang Yi, said that the U.S.’s listing of Beijing as a “strategic competitor” was “fundamentally wrong.”

Charles Koch speaks, in a WaPo op-ed:

Peter Eavis’s take: Those counting on the Fed to help soften the blow of a trade war may be disappointed.

Who misses Gary Cohn: Corporate chieftains like Andrew Liveris of DowDuPont and lawmakers who support free trade.

Protesters plan to gather at the payment processor’s headquarters in Foster City, Calif., at 11 a.m. P.T. today to demand that such companies stop doing business with sellers of assault-style rifles. It’s a demonstration that grew out of Andrew’s column last month arguing that the financial industry could help alter gun regulations.

“Visa quite literally has the power to save lives and their customers are demanding it,” said Nita Chaudhary of UltraViolet, one of the organizers of the protest.

Elsewhere in guns and business: Why Wells Fargo is the biggest lender to the firearms industry. And Republican lawmakers are turning to measures to bolster school security, rather than gun control, just as makers of metal detectors and bulletproof clipboards have hoped.

• President Trump went against legal counsel and asked witnesses in Robert Mueller’s investigation what the special counsel had asked. Mr. Mueller reportedly has gathered evidence that a Seychelles meeting in 2016 between a Trump adviser and a Russian official was an attempt to create a backchannel to the Kremlin. And Hope Hicks reportedly told House investigators that her emails were hacked.

• Some blue-collar Trump voters think the tax overhaul’s results have been meh. (NYT)

• Mr. Trump’s personal lawyer, Michael Cohen, obtained a restraining order against the adult-film actress Stormy Daniels. (NYT)

• How Trump campaign workers were rewarded. (NYT)

So serious is the Trump administration’s review of the chip maker’s takeover bid for Qualcomm that Broadcom has pledged to advance the American lead in 5G wireless research and to create a $1.5 billion fund to train U.S. engineers.

Broadcom’s legally headquartered in Singapore for now, but Michael looked at how foreign it is on measures like number of employees and facilities in the U.S. The short answer: It looks a lot like Qualcomm.

Elsewhere in Broadcom: A customer, Western Digital, has accused the company of playing unfair hardball. And why China views Huawei with pride — and the U.S. views it with fear.

The deals flyaround

• Univision’s C.E.O., Randy Falco, plans to retire at year end, and the broadcaster has called off its I.P.O.

• Mellanox said that it would hold a special shareholder meeting to vote on two corporate governance items, but the activist Starboard Value began a board fight at the chip maker and is unlikely to be happy with a delay in the annual meeting.

• Spotify has picked Citadel Securities to set the price for its direct listing debut, according to unnamed sources. (WSJ)

• Meet JAB, the secretive conglomerate that bought brands like Peet’s and Dr Pepper Snapple and is taking on Nestlé. (WSJ)

• Analysts at JPMorgan said Archer-Daniels Midland would probably bid for Bunge, but the economics of a takeover weren’t compelling. (FT)

• J.M. Smucker is considering selling its bakery brands, including Pillsbury, unnamed sources say. (Bloomberg)

• Bayer is in talks to sell its vegetable seeds business to BASF to win approval for its takeover of Monsanto. (Bayer)

Here are some highlights from his interview with David Streitfeld of the NYT.

On Facebook: the board was “far from perfect” in thinking about the tech giant’s longer-term problems. And the anger now focused on the company is about the industry’s arrogance: “Silicon Valley says the future is going to be better than the past. That is the propaganda, if you will.”

On Mr. Trump: He’s not that close to the president anymore, and the White House has “fallen short” of expectations. But this administration is better than Hillary Clinton’s or any other Republican’s would have been.

On Gawker: He doesn’t want to buy the defunct site to erase its archives, he asserts. “Preserve them, study them instead.”

Virtual currency corner: Bitcoin is at about $10,058 this morning, down after some exchanges reportedly had problems processing orders. The S.E.C. says that digital money trading platforms need to register with it. Japanese regulators punished seven exchanges after the CoinCheck heist.

The tech flyaround

• Travis Kalanick is going from Uber C.E.O. to venture capitalist, with focuses on China and India. (WSJ)

• Uber is retreating from Southeast Asia and is close to selling its operations in parts of the region to Grab, the dominant ride-hailing service, unnamed sources said. (Bloomberg)

• Amazon is offering a discount on its Prime membership program to Medicaid recipients. And Alexa is now less likely to produce spontaneous, sinister laughter.

• Snap is preparing to lay off about 100 people, its biggest round of job cuts to date. (Cheddar)

• Ad prices rose on Facebook after it revamped its News Feed algorithm. (Recode)

• Ireland’s data regulator has threatened big fines for tech giants who run afoul of new European privacy laws. (FT)

• What our tech columnist, Farhad Manjoo, learned after getting his news only in print for two months. (NYT)

The talk of the ad industry today: @DietMadisonAve, an anonymous Instagram account dedicated to exposing sexual harassment in the business. It has published names of alleged harassers and what they’ve been accused of, including men fired by agencies like Droga5 and Wieden & Kennedy.

More from Sapna Maheshwari of the NYT:

Critics, including women who work with agencies, say it’s trial by social media.

Elsewhere in misconduct: Two directors at Wynn Resorts said they would step down in the wake of the Steve Wynn scandal. And the head of the U.S. Forest Service resigned amid sexual harassment accusations.

His day job is head of Vista Equity Partners, one of the top-performing private equity firms. But Mr. Smith is also the wealthiest African-American around, with an extensive record of philanthropy, a topic that he spoke about to Forbes for its annual billionaires issue.

From a statement he had prepared for his signing of the Giving Pledge:

The top 5 billionaires in this year’s list and their estimated net worth:

• Jeff Bezos, $112 billion

• Bill Gates, $90 billion

• Warren Buffett, $84 billion

• Bernard Arnault, $72 billion

• Mark Zuckerberg, $71 billion

Watch the billionaire investor Paul Tudor Jones sing backup on his daughter Caroline’s song “The Difference.” (He really hits the “ooh-wee.”)

• The E.C.B. was expected to take a step away from crisis mode, but then Italy had an election. (NYT)

• Saudi Arabia’s crown prince and Britain’s prime minister agreed to an economic and investment partnership worth billions of dollars. London has been plastered with advertisements for Crown Prince Mohammed bin Salman during his visit.

• The rise of passive investing has attracted scrutiny to corporate governance advisory groups like I.S.S. and Glass Lewis. (FT)

• Deutsche Bank is close to securing Nippon Life as a strategic investor in its asset management division, which it plans to float this month. (FT)

• K.K.R. has agreed to buy a majority stake in Heartland Dental, the U.S.’s largest dental support organization. (WSJ)

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