Anthem Inc. is nearing a deal to buy Cigna Corp. for more than
$48 billion in a transaction that, alongside another recent
proposed tie-up of rivals, would reduce the number of companies
atop the U.S. health-insurance industry to three from five.
Anthem is expected to pay about $187 a share for Cigna,
according to people familiar with the matter. A deal between the
two companies could be announced as soon as Thursday afternoon, one
of them said. The combination still hasn't been signed and the
timing could slip and terms could change.
An Anthem-Cigna tie-up would continue a rapid-fire attempted
reconfiguration of the top echelon of the managed-care industry,
which provides a vital service to vast swaths of the American
population. The biggest players are seeking cost efficiency and
scale as the health-care landscape changes dramatically as a result
of the Affordable Care Act and other factors.
The deal would follow by about three weeks an agreement by Aetna
Inc. to buy Humana Inc. for $34 billion. In a sign of the takeover
frenzy among the companies, Cigna had also been vying for Humana,
but failed to arrange the cash-heavy offer that Humana had
requested, according to people familiar with the matter. The only
company among the five major health insurers that is sitting out
this merger wave, at least so far, is UnitedHealth Group Inc., the
largest by revenue.
There is no guarantee regulators would bless either union, and
indeed legal experts have said they would likely take a close look
at both.
An agreement between Anthem and Cigna would cap off a monthslong
and sometimes contentious mating dance between the companies, with
Anthem at one point going public with its offer.
The two health insurers began holding talks about a combination
last summer, but they broke down over issues including who would
run a combined company. A particular point of contention has been
the role Cigna Chief Executive David Cordani would play in a new
company, and whether and when he would run it. In June, Cigna
rejected a $47.5 billion offer from Anthem, calling it "inadequate
and not in the best interests of Cigna's shareholders."
Write to Dana Mattioli at dana.mattioli@wsj.com and Liz Hoffman
at liz.hoffman@wsj.com
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