U.S. Health insurer Centene has confirmed on Wednesday he will buy WellCare Health Plans in a cash and equity deal to boost his government-backed business, valuing his smaller competitor at $ 15.27 billion
Reuters reported Tuesday that
WellCare shares jumped 23% and are currently trading 12.5% higher at $ 260.28, while those of Centene fell by about 7% before the sun.
reduce Centene's dependence on Obamacare's health bourses at a time when the Trump administration is stepping up its attack on former President Barack Obama's health care law.
Earlier this week, the Justice Ministry (DOJ) supported the federal government. the judge's decision that Obamacare violated the US Constitution as it required people to buy health insurance.
Centene relies on Obamacare's business for about 40% of its revenue, SVB Leerink Analyst Ana Goute is vulnerable to the decision of the Ministry of Justice.
At the end of last year, CVS Health Corp's Pharmacy Assistant Manager completed the acquisition of Aetna Inc. worth $ 69 billion, while Cigna Corp. ended its deal worth $ 54 billion for Express Scripts Holding Co.
Closure in the first half of 2020 will allow it to increase its Medicaid business and save costs as well as expand into Medicare Advantage, which is currently a small segment for the company, said Bernstein's analyst Lance Wilkes .
The deal, including debt, was estimated at $ 1
WellCare shareh old will receive 3.38 shares of Centene's ordinary shares and $ 120 in cash for each share of WellCare, taking ownership of up to 29% of the new company. After the deal, Centene will have about 22 million members in the United States and would generate about $ 500 million in annual cost savings by the second year of closure, the two companies said in a statement.