US-headquartered health insurer Aetna is to
acquire US-based health care company Coventry Health Care in a deal
valued at $7.3bn, which includes the assumption of Coventry
debt.
The acquisition, which is expected to close in
mid-2013, is projected to add nearly 4 million medical members to
Aetna’s membership.
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Aetna said the Coventry acquisition would
substantially increase Aetna’s Medicaid footprint, creating more
opportunity to participate in the expansion of Medicaid and to
pursue high acuity populations as they move into managed care.
Medicaid is a national health care programme in
the US that helps to pay for medical services for
people on low incomes.
Aetna expects to finance the cash portion of
the transaction with a combination of cash on hand and by issuing
approximately $2.5 billion of new debt and commercial paper.
Commenting on the acquisition, Mark T.
Bertolini, Aetna’s chairman, CEO and president, said: “Integrating
Coventry into Aetna will complement our strategy to expand our core
insurance business, increase our presence in the fast-growing
government sector and expand our relationships with providers in
local geographies.”
The transaction is subject to Coventry stockholder approval, as
well as other customary closing conditions, including expiration of
the federal Hart-Scott-Rodino antitrust waiting period and
approvals by state departments of insurance and other
regulators.
