NEW YORK — Anthem has announced plans to buy Cigna for $54.2 billion, creating an insurance giant with 53 million US patients.
Anthem will acquire all outstanding shares of Cigna in a cash and stock deal. Cigna shareholders will receive $103.40 in cash and 0.5152 Anthem common shares for each Cigna common share.
When the deal closes, current Anthem CEO Joseph Swedish will serve as Chairman and Chief Executive Officer of the combined company. Current Cigna President and CEO David Cordani will be President and Chief Operating Officer.
The deal is expected to be completed in the second half of 2016.
Cigna’s offices are in Bloomfield and Philadelphia. Anthem, based in Indianapolis, has pursued Cigna aggressively for months.
Friday’s news comes on the heels of Aetna announcing it’s trying to buy another major healthcare company, Humana, for $35 billion in a buyout frenzy that will transform five massive U.S. health companies into three even larger ones.
There is concern from political leaders these mergers could violate anti-trust laws put in place to protect fair competition.
Experts say if the Anthem-Cigna deal goes through, and Aetna acquires Humana, you will have three large healthcare companies controlling most of American’s healthcare, including UnitedHealthcare.
Federal regulators have to approve these deals and the U.S. Department of Justice will look to see if they violate any anti-trust laws or hinder competition.
Connecticut Senator Chris Murphy is concerned, but says if Connecticut plays its cards right, the Anthem-Cigna merger could lead to job growth.
“I certainly do see a path, having talked to executives at both companies that this could result in the long-term in more jobs here in Connecticut,” said Murphy, “But I want to have the Department of Justice take a look at this to make sure it doesn’t have an effect on consumer prices.”
Senator Murphy went on to say Connecticut has a unique pool of insurance industry talent and as that company grows, the state could make a strong play at getting more of its workforce in Connecticut.
Senator Richard Blumenthal wants both mergers to be examined together by regulators though not separately.
“As the number of companies providing healthcare insurance goes from five to three, consumers have less choice and there is less competition,” said Blumenthal, “There is more market power in fewer hands and that’s why the market as a whole needs to be reviewed and scrutinized.”
Information from the Associated Press is included in this story.
