Calling it a move to accelerate "efforts to create greater efficiencies in the health care system," St. Louis pharmacy benefit management company Express Scripts Inc. announced Thursday it is merging with Franklin Lakes pharmacy Medco Health Solutions. in a deal valued at $29.1 billion.

For each share of Medco stock, shareholders will receive .81 shares of the newly named Express Scripts Holding Co. and $28.80 in cash, for a total compensation of $71.36 per share.

When the transaction is complete, Express Script shareholders will own 59 percent of the company, and Medco's shareholders will own 41 percent. The transaction is expected to close in the first half of 2012.

"We continue to have great confidence in moving forward as a stand-alone business, however, the incremental benefits of combining with Express Scripts are both logical and compelling," said David Snow, chairman and CEO of Medco, in a statement.

The headquarters of the company will be in St. Louis, and Express Script Chairman and CEO George Paz will serve in both roles for the combined company. Two Medco board members will join Express' board.

According to the merger announcement, the deal will create $1 billion in savings, or 1 percent of the combined company's costs. Express Script expects the deal to be accretive in the first year, but more so in the second full year after integration.

Medco currently employs more than 20,000 people, and reported 2010 revenues of $66 billion, ranking it 34th on the Fortune 500 list.

In an e-mailed statement, Medco said it is “too early to say” if any New Jersey employees will be affected by the merger.

“Today, very little changes. As we move forward, transition teams will be formed and begin the work of integrating the two companies,” according to the statement.

Despite the large sizes of both companies, the announcement suggests there is enough competition in the pharmacy benefit management industry to continue "intense" competition.