Anthem Finally Gets Cigna To Agree To Purchase For $54 Billion By Lonce LaMon - July 27, 2015
On Friday, it was announced that Anthem at last got a yes from Cigna to be purchased by them. The merger frenzy which has crossed over many industries, has culminated in the health insurance industry manifesting a $54 billion deal for Anthem to buy its rival Cigna Corp.
Last month Cigna turned Anthem down. However, after staving off Anthem’s pursuit for almost a year, Cigna accepted $188 a share up from Anthem’s $184 per share offer of last month.
The cash-and-stock deal represents a 38% premium to Cigna’s closing price on May 28th, when deal rumors sent many health insurance stocks soaring. The transaction’s total value of $54.2 billion includes debt.
Anthem CEO Joseph Swedish will serve as chairman and chief executive of the combined company. Swedish proclaimed the Cigna acquisition as a way to eliminate unnecessary costs and offer more affordable benefits. Anthem has projected at least $2 billion in potential savings from cutting duplication in sales and administration.
Cigna Chief Executive David Cordani will be Swedish’s second in command as president and chief operating officer.
However, there are many issues that government regulators will look at carefully. Investors in both companies sold off after the deal was announced over concerns about the antitrust scrutiny ahead.
If the deal is approved, the anticipated closing of the purchase would be in the second half of 2016.
lonce@adjustercom.com; Lonce LaMon, journalist, all rights reserved
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