In the latest in a string of multi-billion-dollar acquisitions in the U.S. health care sector, Aetna Inc. (NYSE: AET) has agreed to buy competitor Coventry Health Care Inc. (NYSE: CVH) for $5.7 billion in cash and stock.
The Wall Street Journal reports that Aetna will pay $42.08 per share for Coventry, which is a 20.4% premium to Friday’s closing price. The boards of Aetna and Coventry have approved the deal.
U.S. health care reform act, passed in 2010, was intended to provide insurance coverage for 16 million more Americans through privately run health insurance exchanges in each state. It also will expand Medicaid eligibility for an additional 16 million people by raising limits on household income.
The acquisition of Coventry will help Aetna to lift its share of revenue from its government business from 23% to more than 30%. In July, health insurer WellPoint Inc. (NYSE: WLP) said it would acquire Amerigroup Corp. (NYSE: AGP) for about $4.5 billion, nearly doubling its Medicaid business. And last October, Cigna Corp. (NYSE: CIG) agreed to buy HealthSpring Inc. for $3.8 billion to bolster its Medicare business.
It’s Your Money, Your Future—Own It (sponsor)
Retirement can be daunting, but it doesn’t need to be.
Imagine having an expert in your corner to help you with your financial goals. Someone to help you determine if you’re ahead, behind, or right on track. With SmartAsset, that’s not just a dream—it’s reality. This free tool connects you with pre-screened financial advisors who work in your best interests. It’s quick, it’s easy, so take the leap today and start planning smarter!
Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.