- Centene, the health insurer, is buying smaller rival WellCare in a deal valued at $17.3 billion.
- The two companies on Wednesday said the deal — a cash and stock transaction for $305.39 per share — had been “unanimously” approved by both companies’ boards.
- Watch Centene and WellCare trade live.
The deal, which is expected to close in the first half of 2020, will pay WellCare shareholders $305.39 a share — 3.38 shares of Centene common stock and $120 in cash for each share of WellCare common stock they own, the companies said in a release.
It is expected to create about $500 million of annual net cost synergies by year two, the press release said.
Following the deal’s closing, Centene shareholders will own approximately 71% of the combined entity, with WellCare shareholders owning the rest.
The combined company will be headquartered in St. Louis, Missouri, where Centene in currently headquartered. WellCare is based in Tampa, Florida.
Companies in the healthcare arena — from pharma companies to health insurers — agreed to about $421 billion in transactions in 2018, including debt, according to Refinitiv data — a record high. Last year proved to be a record in healthcare dealmaking, including monster deals like Takeda and Shire’s $59 billion merger and Cigna’s $67 billion Express Scripts acquisition.
And earlier this year, Bristol-Myers Squibb and Celgene said they would combine in a $74 billion deal.
The industry’s sweeping consolidation was spurred in part by low interest rates and a stock market rally that took place the bulk of last year, Business Insider’s Zach Tracer reported in December.
Shares of Centene fell 8% in pre-market trading Wednesday. WellCare was up 13%.
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