With its acquisition of the Bethesda, Maryland-based Coventry Health, the Hartford-based Aetna expands its “footprint” in the Medicare Advantage and Medicaid managed care markets, and unites two large health insurers for a total of nearly 42 million covered lives across the United States
The Hartford, Conn.-based Aetna announced on Aug. 20 that it had entered into a definitive agreement to acquire the Bethesda, Md.-based Coventry Health Care, Inc., for $7.3 billion, through a mix of stock, cash, and borrowing.
The deal, according to a press release issued Monday morning by Aetna, will help to grow Aetna’s Medicare Advantage business, expand Aetna’s footprint in the managed Medicaid business, improve Aetna’s positioning in “consumer-based commercial lines of business, including middle markets, small group and individual,” and “add a low-cost administrative platform and value-based provider networks.”
“Integrating Coventry into Aetna will complement our strategy to expand our core insurance business, increase our presence in the fast-growing government sector, and expand our relationships with providers in local geographies,” said Mark T. Berolini, Aetna’s chairman, CEO and president, in a statement in that press release. “Coventry has distinct capabilities and a local market focus that will accelerate our efforts to bring simpler, more affordable products to consumer insurance exchanges in 2014 and beyond.”
Coventry Health Care currently serves 5 million members nationwide, with members in every state, and substantial Medicare Advantage and Medicaid managed care programs. Aetna has 36.7 million covered lives in the U.S.The acquisition is expected to close sometime in mid-2013.
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