What Carl Icahn Said In His Brutal Letter Slamming the Cigna-Express Scripts Deal

August 7, 2018, 2:18 PM UTC

Carl Icahn has some thoughts about insurer Cigna’s proposed mega-deal with pharmacy benefits manager (PBM) Express Scripts—and he’s not holding back.

In an open letter released Tuesday, the billionaire activist Icahn unleashed a tirade of criticism on the $54 billion Cigna-Express Scripts merger, urging Cigna shareholders to reject the deal and warning that it could be a historically catastrophic corporate marriage.

“Purchasing Express Scripts may well become one of the worst blunders in corporate history, ranking up there with the Time Warner/AOL fiasco and General Electric’s long-running string of value destruction,” wrote Icahn, citing one of the most heavily criticized mergers of the past few decades. Icahn reportedly has acquired a “sizable” stake in Cigna, according to the Wall Street Journal, but the precise extent of that stake is unclear.

Icahn also mentioned the specter of Amazon entering the prescription drug business as a key reason why the Cigna-Express Scripts merger would amount to a “$60 billion folly,” adding that recent federal government actions scrutinizing the largely opaque benefits management industry are also a major red flag. PBMs have been accused of being one of the key reasons why prescription drug prices remain so high.

“When Amazon starts to compete as we believe they will, with their 100 million Prime users and scale distribution system, they will have no trouble breaking into the so called ‘ecosystem.’ With lower prices, the beneficiary will be American consumer, not the owners of Express Scripts,” wrote Icahn in an underlined section of the letter. Icahn also disclosed that he has taken a short position on Express Scripts, expecting the stock to fall.

Cigna and Express Scripts had not released official statements responding to Icahn’s comments as of press time.

Shares of Cigna have risen about 5% since news of Icahn’s opposition to the deal first emerged last week, while Express Scripts stock has fallen about 2%. Shareholders are expected to vote on the deal on Aug. 24.

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