One of the biggest stories in biotech recently has been talks of Anthem acquiring CIGNA. However, today those talks have resulted in a definitive agreement in which Anthem will acquire CIGNA for a total value of $54.2 billion. Today, we’ll discuss the details of the acquisition and what we’ve seen in the market as a result. So, let’s get right to it…
Anthem To Acquire CIGNA For $54.2 Billion
In the news release today, investors learned that Anthem and CIGNA entered a definitive acquisition agreement. Anthem will be purchasing CIGNA in a cash/stock split valued at approximately $188 per share. Under the terms of the agreement, Anthem will pay approximately 55% cash and 45% Anthem shares for an equity ownership of approximately 67%. In an the announcement informing investors of the agreement, here’s what the CEOs of each company involved had to say…
“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 care experience for consumers. We believe that this transaction will allow us to enhance our competitive position and be better positioned to apply the insights of the increasingly diverse markets, membership, and communities we serve. The CIGNA team has built a set of capabilities that greatly complement our own offerings and the combined company will have a competitive presence across commercial, government, and international specialty segments. These expanded capabilities will enable us to better serve our customers as their health care needs evolve…” Joseph Swedish, Anthem CEO.
“Our companies share proud histories and an even brighter future. Going forward our new company will deliver an acceleration of innovative and affordable health and protection benefits solutions that help address our health system’s challenges and provide supplemental insurance protection, and health care security to consumers, their families, and the communities we share with them. 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…” David M. Cordani, CIGNA CEO.
How The Market Reacted To The News
Both Anthem and CIGNA are seeing declines in today’s trading session. Here’s what we’ve seen so far today (12:59).
ANTM – ANTM is currently down 1.99%; trading at $152.12
CI – CIGNA is trading at $148.00 after a decline of 4.12% so far today.