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Aetna is buying Humana for $37 billion
(AP Photo/Douglas Healey) A sign for Aetna insurance is seen in Hartford, Conn. Thursday Feb. 9, 2006
Aetna is buying Humana for $37 billion.
It's the latest in a flurry of merger activity among the nation's largest health insurers.
And according to Bloomberg, it's set to be the largest ever in the health-insurance industry.
A statement released early on Friday said the deal is a combination of cash and stock for about $230 per Humana share. Humana closed at $187.57 per share on Thursday, and the deal is a 23% premium to that price.
Humana shareholders will get $125 in cash, and 0.8375 of Aetna shares for each Humana share.
According to the statement, the combined company would be the second-largest in the managed care industry, and would help lower costs.
What also made Humana attractive to Aetna was its large client base of seniors in its Medicare Advantage Program.
“The acquisition of Humana aligns two great companies and will significantly advance our strategy of more effectively serving members in a rapidly changing health care industry,” said Aetna CEO Mark Bertolini in the statement.
A report Thursday night from the Wall Street Journal indicated that a deal was imminent. Bloomberg reported that both companies had been locked in negotiations for weeks.
Shares of Humana have been spiking of late, as rumors of its imminent takeover by Aetna were swirling. Humana's stock popped 8% one week ago Thursday.
As we highlighted last week, the Aetna-Humana collaboration is just part of "an intense five-way fight for consolidation" among the big healthcare insurers who are trying to stay competitive. Such measures have become ever more pertinent since the Supreme Court affirmed an important element of the Affordable Care Act June 25.
The motivation for such consolidation among the insurers is to cut costs for themselves and, they argue, for consumers also.
Elsewhere on the healthcare merger front, Cigna and Anthem have been locked in an acquisition chase of their own. Cigna in late June rejected what it called an "inadequate" $47 billion takeover bid from Anthem, to which Anthem responded by reiterating its offer less than a day later.
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