Anthem to Buy Cigna, Create Biggest U.S. Health Insurer
NEW YORK, July 24 (UPI) — Health insurer Anthem said it will buy rival Cigna Corp. in a deal worth $54.2 billion, creating the largest U.S. health insurer with some 53 million patients nationwide and renewing concerns about competition in the industry.
The deal, which is expected to close in the second half of 2016 if it passes regulatory approvals, combines the second and fifth largest health insurers by revenue. Anthem said it will pay $103.40 in cash and 0.5152 of its shares for every Cigna share. The deal values Cigna at $188 per share based on Anthem’s close of $155 on Thursday. The new company is projected to generate $115 billion in revenues annually.
The deal comes just weeks after healthcare giant Aetna announced a $37 billion agreement to acquire rival Humana, raising more questions about competition in the industry.
“We believe that this transaction will allow us to enhance our competitive position and be better positioned to apply the insights and access of a broad network and dedicated local presence to the healthcare challenges of the increasingly diverse markets, membership, and communities we serve,” said Joseph Swedish, president and chief executive officer of Anthem.
David M. Cordani, President and Chief Executive Officer of Cigna, added, “Going forward our new company will deliver an acceleration of innovative and affordable health and protection benefits solutions that help address our health system’s challenges and provide supplemental insurance protection, and health care security to consumers, their families, and the communities we share with them.”
Anthem’s Blue Cross and Blue Shield health plans are in 14 states and its Amerigroup Medicaid plan is in 19 states. Cigna has insurance plans across the United States and globally.
