Aetna to acquire Humana in $37bn deal

Aetna has unveiled plans to acquire rival health insurer Humana in a $37 billion deal.

Aetna will acquire all of Humana’s outstanding shares for a combination of cash and stock valued at approximately $230 per Humana share based on the closing price of Aetna common shares on July 2, 2015.

Under the transaction, Aetna’s shareholders will own approximately 74 percent of the combined company and Humana’s shareholders would own approximately 26 percent.

The combination brings together Humana’s growing Medicare Advantage business with Aetna’s diversified portfolio and commercial capabilities, said the companies.

This will “create a company serving the most seniors in the Medicare Advantage program and the second-largest managed care company in the US”.

The combined company would have projected 2015 operating revenue of approximately $115 billion, with approximately 56 percent from government sponsored programmes (including Medicare and Medicaid).

“The acquisition of Humana aligns two great companies and will significantly advance our strategy of more effectively serving members in a rapidly changing health care industry,” said Mark Bertolini, Aetna chairman and chief executive officer (CEO).

“This combination will allow us to continue to invest in excellent service for our members and strengthen our partnerships with providers to deliver high quality care at an affordable price. We have great respect for Humana, their talented team, their culture and their strong medical management capabilities.”

Bruce Broussard, president and CEO of Humana, added: “Aetna and Humana share a strong commitment to improving the health and well-being of consumers, whatever their needs and wherever they are on their lifelong health journey.

“Through the use of technology and integrated services to simplify the consumer experience, the combined entity will be even more effective in meeting the health needs of many more people -- especially people with chronic conditions, who will benefit from Humana’s home health, pharmacy management, and data analytics programmes.”

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