Centene to buy WellCare in $17.3bn US healthcare deal

Centene Corporation and WellCare, two big players in the US government-sponsored health insurance programme, have announced that they are merging in a deal worth $17.3 billion.

Centene is acquiring WellCare in a cash and stock transaction for $305.39 per share for a total enterprise value of $17.3 billion. The transaction has been unanimously approved by the boards of both companies.

Upon completion, Centene shareholders will own approximately 71 percent of the combined entity, with WellCare shareholders owning approximately 29 percent.

The combined company will have approximately 22 million members across all 50 states. Centene said that the merger intends to create a "premier healthcare enterprise focused on government-sponsored healthcare programmes and a leader in Medicaid, Medicare and the Health Insurance Marketplace".

"This transformational combination creates a leading healthcare enterprise that is committed to helping people live healthier lives through a localized approach and provides access to high-quality healthcare through a wide range of affordable health solutions," said Michael Neidorff, chairman and chief executive officer of Centene.

Neidorff added: "With the addition of WellCare, we expect to bolster and diversify our product offerings, increase our scale and have access to new markets, which will in turn, enable us to continue investing in technology and better serve members with innovative programs designed to meet their needs.

"Centene has grown significantly by adding capabilities that have increased revenues and enabled margin expansion. The addition of WellCare is the next logical step in our growth strategy and to drive value for our collective shareholders. We have long admired the WellCare organization and together look forward to building on our mission of transforming the health of our communities, one person at a time."

Ken Burdick, WellCare's chief executive officer, said: "We are enthusiastic about the opportunity to create a high-performing combined business focused on government-sponsored managed care that will bring benefits to all of our stakeholders.

"By combining with Centene, we will create a more competitive, diversified company that is better able to deliver fully integrated, high-quality, cost-effective services for our members and government partners. Both companies share a deep history and focus on the government-sponsored healthcare market and, together, our expertise will allow us to deliver enhanced value for our shareholders, opportunities for our associates and better outcomes for our members."

The transaction is subject to approval by Centene and WellCare shareholders, and also conditioned on clearance under the Hart-Scott Rodino Act, receipt of required state regulatory approvals and other customary closing conditions. It is expected to complete in the first half of 2020.

Get all the latest re/insurance industry news with our daily newsletter -  sign up here.

More of today's news

CCR Re launches France-domiciled sidecar to access new ILS investors

Markel appoints senior director to lead growth strategy in Asia

Monument Re acquires Ireland-based Inora Life from Societe Generale

Aon hires Marsh talent to chair EMEA M&A and transaction solutions business

Hyperion reveals new group chief operating officer 

Download our whitepaper: 'Why Automation & AI Matters For Commercial Lines'