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Anthem Presses Cigna Deal

Health insurer Anthem Inc. on Monday stood by its offer to buy rival Cigna for $47 billion. The Indianapolis company, parent of Anthem Blue Cross in Thousand Oaks, first made its offer on Saturday to buy its Bloomfield, Conn.-based rival. Anthem would pay $184 a share, an 18 percent premium over Cigna’s closing price on Friday. The combination of Anthem, the nation’s second-largest health insurer, and Cigna, the fourth largest, would create a behemoth with revenue of $115 billion and 53 million policy holders. It would be larger than UnitedHealth Group Inc., currently the No. 1 insurer. Anthem said in its proposal that the combined company would have “critical diversification and scale to lead the transformation of health care delivery for consumers.” Company officials held a press conference Monday to explain the advantages of combining the companies Under Anthem’s proposal, Anthem shareholders would end up owning about 76 percent of combined company and Cigna shareholders 24 percent. “The proposal we submitted to Cigna presents significant and compelling value for shareholders in a transaction that would bring together two highly complementary platforms with a powerful growth potential,” said Anthem Chief Executive Joseph Swedish in a statement Monday. “Our management team has delivered consistently strong returns for shareholders and is absolutely confident in its ability to achieve the value inherent in this transaction.” Also, Anthem expressed confidence it could obtain any government approvals and financing to complete the transaction. Investors in both companies signaled support for the deal. Cigna shares closed Monday up $7.34, or 4.7 percent, to $162.60, while Anthem shares closed up $5.98, or 3.6 percent, to $171.04. Both issues trade on the New York Stock Exchange.

Joel Russel
Joel Russel
Joel Russell joined the Los Angeles Business Journal in 2006 as a reporter. He transferred to sister publication San Fernando Valley Business Journal in 2012 as managing editor. Since he assumed the position of editor in 2015, the Business Journal has been recognized four times as the best small-circulation tabloid business publication in the country by the Alliance of Area Business Publishers. Previously, he worked as senior editor at Hispanic Business magazine and editor of Business Mexico.

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