The benefits of “scrambling” merged eggs

NACDS v. Express Scripts may have broad effects on companies deciding when and whether to close transactions

After almost a year of review, the Federal Trade Commission (FTC) announced early on the morning of April 2 that it had closed its investigation of the proposed merger between two large pharmacy benefit managers—Express Scripts Inc. and Medco Health Solutions Inc.—without taking any action. Upon the conclusion of the FTC’s investigation, the final closing condition of the transaction was met, and Express Scripts and Medco were free to close.

The proposed merger and the FTC’s review of it were closely watched in many circles, including by investors, Congress, competitors and customers. During the investigation, Express Scripts made several public announcements on its progress and the expected timing of closing (if the FTC did not pursue litigation). For instance, on March 12, Express Scripts publicly disclosed that it had agreed with the FTC not to close the transaction and that Express Scripts expected to close sometime in the “earlier part of the second quarter of 2012.” Sixteen days later, Express Scripts signaled that the closing could occur earlier than previously suggested, “as early as the week” of April 2.

 

On April 3, Judge Cathy Bissoon held a phone conference with the parties after which she set a hearing date on the issue of the requested TRO/hold separate for April 10 (one week later). Judge Bissoon did not ask Express Scripts to discontinue its integration of Medco. Over the course of the following week, Express Scripts continued to scramble the eggs, and by April 10, counsel for Express Scripts was able to provide a litany of integration events that had already occurred, including termination of senior and junior management at Medco and Express Scripts’s review of Medco’s confidential and trade secret information.

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Corey Roush

Corey Roush is a partner in the Washington D.C. office of Hogan Lovells, where he focuses on antitrust litigation, white collar criminal defense, corporate governance...

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Logan Breed

Logan Breed is a partner in the Washington D.C. office of Hogan Lovells, concentrating on antitrust clearance of mergers and acquisitions, antitrust litigation, and non-merger...

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Leigh Oliver

Leigh Oliver is an associate in the Washington D.C. office of Hogan Lovells, with a focus on antitrust and trade regulation law

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