Indianapolis-based WellPoint Inc., the parent company of Anthem Blue Cross and Blue Shield plans to acquire Virginia Beach-based Amerigroup Corp. in a $4.9 billion all-cash deal.
Amerigroup, a Fortune 500 company, coordinates services in publicly funded health care programs in 13 states. Under the deal, Wellpoint, the Blue Cross and Blue Shield licensee in 14 states, will pay $92 for each Amerigroup share, which closed at $64.34 a share on Friday.
Wellpoint said the acquisition will help the company more effectively serve a growing number of Medicaid patients, including those in expanding programs for dual-eligible, seniors and persons with disabilities plus long-term services and support programs.
“We believe that this combination will create an industry leader in the government sector serving Medicaid and Medicare enrollees.” Angela F. Braly, chair, president and CEO of WellPoint, said in a statement. “This is an opportunity to capitalize on the strengths of both companies to better serve our members and position our companies for future growth as the health insurance industry changes and as we prepare for health insurance exchanges” [being set up in each state in compliance with the federal health-care reform law.
Braly said Amerigroup has a “proven track record in working with state and federal governments and the provider community to improve health care costs and quality for its customers.”
Upon completion of the deal, WellPoint, with its affiliated Medicaid plans, will serve more than four-and-a-half million beneficiaries of state sponsored health care programs. It will manage Medicaid programs in 19 states.
The acquisition is expected to close in the first quarter next year. It is subject to certain state and federal regulatory approvals and a voted by Amerigroup’s stockholders. The transaction will be financed with cash on hand, commercial paper and new debt issuance.
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