Centene To Acquire Health Net In Transaction Valued At About $6.8 Bln

(RTTNews) - Centene Corp. (CNC) and Health Net, Inc. (HNT) announced that their Boards of Directors 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 about $6.8 billion, including the assumption of approximately $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 $37 billion.

The companies believe that the addition of Health Net's high-quality Medicare platform to Centene's Medicaid programs provides an opportunity for additional growth across the combined company's markets.

As per terms of the agreement, Health Net shareholders would receive 0.622 shares of Centene common stock and $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 $78.57 per share represents a premium of approximately 21% over Health Net's closing stock price on July 1, 2015, and of approximately 26% on June 1, 2015.

Upon completion of the transaction, Centene shareholders would own about 71% of the combined entity, with Health Net shareholders owning approximately 29%. The transaction is expected to be significantly accretive to Centene's diluted earnings per share in the first year following closing.