CMA will close a $5 billion takeover of a major pharmacy benefit manager, the company announced on Tuesday.
The combined company will control more than 20 per cent of the pharmacy benefit managers industry, which accounts for $1.6 trillion in annual sales and employs more than 7,000 people.
The deal is a “further step in CMA’s transformation” from a pharmacy benefit management company, CMA president and CEO Stephen Hickey said in a statement.
“We are thrilled to announce that we have concluded a definitive agreement to acquire CMA for approximately $5 per share,” he said.
“This transaction is part of our long-term strategy to ensure that CMA remains a premier provider of quality pharmacy benefits, including pharmacy services and the purchase of the most innovative drugs, diagnostics and devices.”
Hickey added that the combined company would be called CMA, with the new name CMA Health Care.
CMA would be the largest pharmacy benefit-management company in the country, with nearly 40,000 employees and a network of more than 1,300 pharmacies.
Hickey noted that the deal would also be the first merger in Canada, though the country already has the largest combined pharmacy benefit company in North America, Canadian Health Care Corp., with more than 21,000 pharmacists.
CIMC’s pharmacy benefits are often highly concentrated in major cities, where people often have little choice for their own medicine, Hickey wrote in a memo to staff.
Cimco and CIMCA had been seeking a buyer for CIMCO since last year, but that didn’t work out.
CImco said in February it was considering an acquisition.
The merger comes as CIM, which is based in Toronto, is also looking to acquire drugmaker Novartis.
The two companies have been in talks for years, with Cimca having already bought a chunk of Novartes.
Both companies operate in a market dominated by the United States, with Canada being the largest market outside the U.S. and a key market for Novarties drugs.
Cimi, which has been owned by Novartics since 2010, has also been looking for a buyer since at least late last year.
The Canadian pharma industry has suffered a severe downturn since the U,S.
Drug Enforcement Administration imposed tougher regulations on prescription drug pricing and distribution.
In October, the U of C’s university president and president of the board of governors, Michael McEwen, told reporters the province would not seek approval from regulators to expand a program to help people who cannot afford to buy drugs.
But CIM has been able to offer some discounts to its pharmacists through the program, which provides cash assistance to those with limited income.