Mergers, Acquisitions and Divestitures

12 Months Ended

Dec. 31, 2020

Mergers, Acquisitions and DivestituresDivestiture of Group Disability and Life business

On December 31, 2020, Cigna completed the sale of its U.S. Group Disability and Life business to New York Life Insurance Company for cash proceeds of $6.2 billion. The Company recognized a gain of $4.2 billion pre-tax ($3.2 billion after-tax), which includes recognition of previously unrealized capital gains on investments sold (see Note 14 for further information).

In December 2019, Cigna entered into a definitive agreement to sell this business and since the sale was expected to close in the fourth quarter of 2020 following applicable regulatory approvals and other customary closing conditions, the Company aggregated and classified the assets and liabilities directly associated with the pending sale of its Group Disability and Life business as held for sale and has reported them separately on our Consolidated Balance Sheet as of December 31, 2019.

The assets and liabilities of business held for sale were as follows:


(In millions)	December 31, 2019
Cash and cash equivalents	$	743
Accounts receivable, net	521
Investments	7,709
Other assets	539
Total assets of business held for sale	9,512
Insurance and contractholder liabilities	6,308
Other liabilities	504
Total liabilities of business held for sale	$	6,812

B.Acquisition of Express Scripts

On December 20, 2018, Cigna acquired Express Scripts Holding Company (“Express Scripts") through a series of mergers for a purchase price of $52.8 billion, which consisted of cash and stock consideration. The purchase price was allocated to the tangible and intangible net assets acquired based on management’s final estimates of their fair values. Total goodwill of $38.4 billion was recorded, of which $33.7 billion resides in the Company’s Evernorth segment, with the remainder in the Company’s U.S. Medical segment. The results of Express Scripts have been included in the Company’s Consolidated Financial Statements from the date of the acquisition. Revenues of Express Scripts included in the Company’s results for 2018 approximated $2.6 billion and Express Scripts’ results of operations were immaterial to Cigna’s net income.

C.Integration and Transaction-related Costs

The Company has incurred costs detailed in the table below related to the acquisition and integration of Express Scripts, the terminated merger with Anthem, Inc. (“Anthem”), the sale of the U.S. Group Disability and Life business and other transactions.

These costs consisted primarily of certain projects to integrate the Company’s systems, products and services, fees for legal, advisory and other professional services and certain employment-related costs. Costs in 2018 also included charitable contributions and amortization of certain financing fees and interest expense on the debt issued in the third quarter of 2018 to fund the Express Scripts merger, net of investment income earned on proceeds of the debt issuance.


	2020				2019				2018
(In millions)	Before-tax		After-tax		Before-tax		After-tax		Before-tax		After-tax
Interest expense on newly-issued debt	$	—	$	—	$	—	$	—	$	227	$	179
Net investment income on debt proceeds	—		—		—		—		(123)		(97)
Charitable contributions	—		—		—		—		200		158
Legal and advisory fees	48		36		53		41		204		185
Bridge facility fees	—		—		—		—		140		111
All other integration and transaction-related costs	479		368		499		386		204		133
Integration and transaction-related costs, net	$	527	$	404	$	552	$	427	$	852	$	669