It’s not yet clear how Express Scripts Inc.’s $29.1 billion acquisition of rival Medco Health Solutions will affect the companies’ central Indiana operations—or their 800-plus employees at two facilities here.

St. Louis-based Express Scripts announced the deal to create the nation’s largest pharmacy-benefits manager Thursday morning. In a conference call, Chairman and CEO George Paz said he’s not sure what consolidation will result from the purchase.

“Medco, we compete with them everyday,” Paz said. “They’ve got incredible people, incredible systems, incredible approaches. … I think I’ve got pretty good ones, too. And now the question is, how do I put them both together and get the best of the best?”

New Jersey-based Medco has 430 workers at a $140 million automated pharmacy and distribution center in Whitestown. It planned to ramp up Boone County employment to 1,300, but fell short of that goal after losing some large contracts.

Express Scripts, which acquired WellPoint Inc.’s pharmacy benefits subsidiary in 2009, said last year it had 400 employees at a specialty drug distribution facility near Indianapolis International Airport and planned to add 180 positions there by 2012.

Both facilities opened about four years ago.

Buying Medco gives Express Scripts the scale to dominate  the market for contracts to manage prescription drug benefits for corporate and government clients.

Medco also said Thursday that it lost an $11 billion contract with UnitedHealth Group Inc., accounting for 17 percent of its business. The loss drops Medco to No. 3 in the industry, trailing Express Scripts and CVS CareMark Corp.

“Wow, I didn’t see this coming,” Art Henderson, an analyst at Jefferies & Co. in Nashville, Tenn., said in an e-mail Thursday. “There are unbelievable synergies here, but I am sure this will go through a lengthy” review by U.S. regulators.

The U.S. Federal Trade Commission likely will examine the deal closely, he said. The takeover would be the largest in pharmacy services in at least a decade, surpassing the $21.7 billion deal that formed CVS Caremark in 2007.

The $71.36-a-share cash-and-stock offer is 28 percent more than Medco’s closing price of $55.78 Wednesday. Medco stockholders will receive $28.80 in cash and 0.81 of an Express Scripts share for each Medco share, according to a statement from the companies.

Pharmacy-benefit managers negotiate drug prices for employer and government insurance plans, and manage worker claims.

A company that combines Medco and Express Scripts would control about 30 percent of the market by 2013, said Helene Wolk, an analyst at Sanford Bernstein in New. CVS CareMark, based in Rhode Island, will be “in the low 20s,” while UnitedHealth will grow to the “low teens,” she said.

“It will be challenging to get this past the FTC, but with the growth of UnitedHealth,” an insurer with its own pharmacy benefit unit, “we will be back to having three dominate players,” Wolk said. “This is a business that is hyper price competitive, and the competition is what the FTC worries about losing. If anything, as it has consolidated, the market has only gotten more competitive.”

Express Scripts CEO Paz said the deal wouldn’t have been struck “unless we thought it would be approved. We believe we will work our way successfully through the regulatory approval process,” he said.

Medco, led by Chairman and CEO David Snow, already had lost $3.5 billion in contracts since March. The loss of additional business would have increased the pressure on Medco executives to fill in the revenue gap, because scale matters so much in the industry, Wolk said in June.

Medco shares have declined 13 percent since May 26, the day before the company announced loss of a $3 billion contract covering 9.8 million mail-order prescriptions. In March, Medco lost the renewal of a $500 million contract with the California Public Employees Retirement System. The stock also was weighed down by investor concerns the company would lose the UnitedHealth contract, analysts said.

Competition intensified among pharmacy-benefits managers after Express Scripts acquired Indianapolis-based WellPoint’s pharmacy-benefits unit with 25 million members. CVS, in the past year, grabbed a contract with Capital Blue Cross of Pennsylvania from Express Scripts and the federal workers plan from Medco.

The number of potential targets dwindled after Connecticut-based Aetna Inc. gave a 12-year, $9.5 billion contract to CVS last July and UnitedHealth began investing in its pharmacy benefits unit.

“People in their wildest speculation thought that, maybe in 2013, after Medco lost UnitedHealth, it could merge with Express Scripts, but frankly no one put a lot of stock in it,” Bernstein’s Wolk said.

The deal for Medco would be the second-largest this year, after AT&T Inc.’s $39 billion planned acquisition of T-Mobile USA Inc. The Wall Street Journal reported the transaction earlier Thursday.

The combination of Express Scripts and Medco won’t be an easy one because the two companies have different cultures, Wolk said. Medco is more strategic and takes a long-term approach to business, while Express Scripts tends to have a short-term, financially driven vision, she said.

Both companies also reported second-quarter earnings. Express Scripts had a profit of 71 cents a share, excluding some items, matching the average analyst estimate compiled by Bloomberg. The company reaffirmed its forecast for this year of $3.15 to $3.25 a share. Analysts are predicting $3.19, the average of 25 estimates compiled by Bloomberg.

Medco posted second-quarter profit excluding some costs of 96 cents a share, beating the average analyst estimate of 94 cents.