Aetna buys Humana for $37B amid record number of health care deals
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Health care-insurance firm Aetna announced a $37 billion agreement Friday to acquire smaller rival Humana in a deal that continues the rapid consolidation in the U.S. health care industry.
In the first six months of the year, a record $296 billion in deals have been announced in the industry, according to Dealogic, a research firm that specializes in mergers and acquisitions.
Aetna will pay approximately $230 a share for the Humana, which is the USA's second-largest provider of private Medicare insurance — a booming business that has expanded rapidly alongside an aging U.S. population.
Under the terms of the agreement, which has been unanimously approved by the board of directors of each company, Humana stockholders will receive $125 in cash and 0.8375 Aetna common shares for each Humana share, the companies said.
Aetna agreed to buy Humana for about $37B in cash and stock. The transaction values Humana at about $230 a share. Bloomberg's Nejra Cehic reports on "Countdown." Bloomberg
The combined company will have 2015 revenue of approximately $115 billion, with roughly 56% of that revenue coming from government-sponsored programs such as Medicare and Medicaid.
The merged firm will have over 33 million medical members, based on memberships as of March 31, 2015.
Current Aetna Chief Executive Officer and Chairman Mark Bertolini will serve in that role at the combined company.
Aetna and Humana announced they will hold a public conference call to discuss the transaction at 8:30 a.m. ET on Monday.
With U.S. markets closed for the Independence Day weekend, neither firm's shares were active in pre-market trades.
The industry got a boost last week when the Supreme Court upheld a part of President Obama's Affordable Care Act, which has significantly increased the number of Americans covered by health insurance.