US health insurers expect to complete deal in second half of 2016
Anthem has agreed to buy fellow US health insurer Cigna in a deal valued at $54.2bn (£34.8bn)
The insurers expect the transaction to close in the second half of 2016.
The deal is the latest in a spate of multi-billion-dollar mergers and acquisitions in the insurance industry in recent weeks.
Deals include broking group Willis’s $18bn merger with advisory firm Towers Watson, announced on 30 June, and ACE’s planned purchase of fellow insurer Chubb for $28.3bn, announced just a day later.
Cigna shareholders will receive $103.4 in cash and 0.5152 Anthem shares for each of their Cigna hares.
Anthem said its payment is a 38.4% premium on Cigna’s closing share price on 28 May.
The amount Anthem will pay is 55% cash and 45% shares.
The combined company will trade as Anthem and will have annual revenues of more than $115bn.
Anthem shareholders will own 67% of the combined group and Cigna shareholders will own the remaining 33%.
Current Anthem chief executive Joseph Swedish will be chairman and chief executive of the combined company and Cigna chief executive David Cordani will be president and chief operating officer.
When the deal closes , the Anthem board of directors will be expanded to 14 members. David Cordani and four independent directors from Cigna’s current board will join the nine current members of the Anthem board.
Swedish said: “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 health care challenges of the increasingly diverse markets, membership, and communities we serve.”
Cordani added: “The complementary nature of our businesses will allow us to leverage the deep global health care knowledge, local market talent, and expertise of both organizations to ensure that consumers have access to affordable and personalized solutions across diverse life and health stages and position us for sustained success.”