Centene agrees to buy Health Net in $6.8 bn cash and stock deal
06/07/2015 11:23

Centene Corporation and Health Net, Inc. announced that the Boards of Directors of both companies have unanimously approved a definitive agreement under which Centene will acquire all of the shares of Health Net in a cash and stock transaction valued at approximately USD 6.8 billion, including the assumption of approximately USD 500 million of debt.

The combination of Centene and Health Net would create a leading diversified multi-national healthcare enterprise with more than ten million members across the country and estimated 2015 pro forma premium and service revenues of approximately USD 37 billion.

Under the terms of the agreement, Health Net shareholders would receive 0.622 shares of Centene common stock and USD 28.25 in cash for each share of Health Net common stock. Based on Centene’s closing stock price on July 1, 2015, the implied consideration of USD 78.57 per share represents a premium of approximately 21 per cent over Health Net’s closing stock price on July 1, 2015, and of approximately 26 per cent on June 1, 2015. Upon completion of the transaction, Centene shareholders would own approximately 71 per cent of the combined entity, with Health Net shareholders owning approximately 29 per cent. The transaction is expected to be significantly accretive to Centene’s diluted earnings per share in the first year following closing.