Centene, WellCare win shareholder support for $15.27 billion deal

(Reuters) - Shareholders of Centene Corp and WellCare Health Plans Inc voted in favor of a merger of the health insurers, setting the stage for the creation of a major new player in government-sponsored healthcare plans. The $15.27 billion buyout of smaller rival WellCare would help Centene bulk up its government-backed Medicare and Medicaid businesses. As the Trump administration steps up its efforts to strike down the healthcare law introduced by former President Barack Obama, the merger would also help Centene reduce its exposure to Obamacare healthcare exchanges

Reuters June 25, 2019 01:05:39 IST
Centene, WellCare win shareholder support for $15.27 billion deal

Centene WellCare win shareholder support for 1527 billion deal

(Reuters) - Shareholders of Centene Corp and WellCare Health Plans Inc voted in favor of a merger of the health insurers, setting the stage for the creation of a major new player in government-sponsored healthcare plans.

The $15.27 billion buyout of smaller rival WellCare would help Centene bulk up its government-backed Medicare and Medicaid businesses.

As the Trump administration steps up its efforts to strike down the healthcare law introduced by former President Barack Obama, the merger would also help Centene reduce its exposure to Obamacare healthcare exchanges.

Analysts have noted that the health insurer would be among the most vulnerable companies if the law were to be overturned as Centene's Obamacare business accounts for about 40% of its earnings.

However, the WellCare offer was met with criticism by hedge funds that saw Centene as a good target for Humana Inc, a larger Medicare-focused company.

Humana earlier this month said it would not bid for Centene and proxy firm Institutional Shareholder Services recommended that shareholders vote for the WellCare deal.

Shareholders holding about 85% of Centene common stock and those with nearly 83% of WellCare shares cast their vote at the Monday meetings. About 99% of the voters at each company supported the merger.

Centene and WellCare said it had received requests for additional information from the U.S. Department of Justice. The companies are also working through the 26-state insurance approval processes required for the deal.

Centene had previously said it would also have to make some divestitures in Nebraska and Missouri for the deal to go through. The insurers said they expect the deal to be completed by the first half of 2020.

The combined company will have 22 million members, up from around 14 million for Centene at the end of 2018.

Centene shares fell 1.9% to $55.31, while WellCare dropped 1.3% to $295.4 in afternoon trading.

(Reporting by Saumya Sibi Joseph in Bengaluru; Editing by Anil D'Silva and Shounak Dasgupta)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.