After much negotiating, the Indianapolis-based health insurer Anthem has struck a deal to acquire the Bloomfield, Ct.-based Cigna for $54.2 billion, the largest transaction of its type in the history of U.S. health insurance.
The agreement, confirmed by Anthem on July 24, will include Anthem acquiring all outstanding shares of Cigna in a cash and stock transaction. The deal equates to approximately $188.00 for each Cigna share based on Anthem's closing share price on May 28, valuing the transaction at $54.2 billion on an enterprise basis.
It’s been quite the busy year already for Anthem, which suffered a massive hack of its IT systems that exposed the personal data of approximately 80 million customers in February.
It was then reported in early June that Anthem was strongly considering acquiring the Louisville-based insurer Humana. Nonetheless, it was reported a few weeks later that Anthem made a $47 billion takeover bid for Cigna after months of negotiations had stalled. However, soon after, Cigna fired back, rejecting the bid as ‘inadequate and not in the best interest of Cigna’s shareholders.” Then, on July 3, the Hartford-based Aetna said it had agreed to acquire Humana for $37 billion in cash and stock, in the largest acquisition of its type in the history of health insurance at the time.
Now, this deal surpasses that one, as health insurers across the U.S. continue to race towards consolidation. The transaction is expected to close in the second half of 2016. In a statement, Joseph Swedish, Anthem’s president and CEO said, “We are very pleased to announce an agreement that will deliver meaningful value to consumers and shareholders through expanded provider collaboration, enhanced affordability and cost of care management capabilities, and superior innovations that deliver a high quality health are experience for consumers. We believe that this transaction will allow us to enhance our competitive position and be better positioned to apply the insights and access of a broad network and dedicated local presence to the healthcare challenges of the increasingly diverse markets, membership, and communities we serve.”