Anthem plans acquisition of CIGNA

On Friday, July 24th Anthem, Inc definitively said it would buy Cigna Corp for about $54.2 billion, creating the largest U.S. health insurer by membership.

The deal has raised a number of concerns with lawmakers and physician groups raising fears of market exploitation and corporate policies that are contrary to patient interests.

According to Anthems press release:

  • Combination will create the premier health services company with critical diversification to lead the transformation of health care for consumers by enhancing health care access, quality and affordability.
  • Cigna shareholders receiving consideration of $103.40 per share in cash and 0.5152 shares of Anthem stock in exchange for each Cigna share, reflecting a value of $188.00 based on Anthem’s unaffected share price as of May 28, 2015.
  • Combination expected to drive adjusted earnings per share accretion approaching 10% in year one, with accretion more than doubling in year two.
  • The combined company will cover approximately 53 million medical members with well positioned commercial, government, consumer, specialty businesses along with a market-leading international franchise.

As anticipated the proposed merger between Anthem and Cigna is drawing heavy scrutiny from federal agencies. Furthermore regulators are anticipated to review both the Anthem Cigna deal at the same time as a review of a potential Aetna Humana deal.

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About Christopher Johnson

Christopher manages the consulting services department of J.W.Terrill providing regulatory, analytical, technical and wellness support to clients.

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