Anthem reaches $48B deal to acquire Cigna

HBJ file photo Cigna President and CEO David Cordani would become president and chief operating officer, if Anthem's $48 billion acquisition offer is approved by regulators.

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Indianapolis health insurer Anthem said it has signed an approximately $48.4 billion agreement to acquire Bloomfield’s Cigna Corp.

Under the agreement — some details of which were reported Wednesday night by the Wall Street Journal and others — Anthem would pay $103.40 per share in cash and half a share of Anthem common stock for each share of Cigna stock, totaling $188 per share.

Anthem President and CEO Joseph Swedish would lead the combined company, while Cigna President and CEO David Cordani would become president and chief operating officer. Anthem’s nine-member board would also add five seats, to be filled by Cordani and four independent directors from Cigna’s board.

“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,” Cordani said in a statement.

“We believe that this transaction will allow us to enhance our competitive position and be better positioned to apply the insights and access of a broad network and dedicated local presence to the health care challenges of the increasingly diverse markets, membership, and communities we serve,” Swedish said.

Cigna rejected Anthem’s initial $184 per share offer in June, with management calling it inadequate and saying they were “deeply disappointed” that Anthem made the offer public.

Cigna was worried about the leadership transition, according to Bloomberg, and was also concerned about limits on Anthem’s use of Blue Cross and Blue Shield-branded plans in certain geographies, according to Forbes.

The deal requires state and federal regulatory approvals, but Cigna and Anthem hope to close the transaction in the second half of next year.

Cigna simultaneously announced Friday morning that it expects to announce second-quarter profits next week of at least $574 million, or $2.21 per share, up from $573 million, or $2.12, in the second quarter of 2014.