Anthem Inc. boosted its takeover offer for Cigna Corp. and is going public with the bid after the two sides failed to reach agreement. This is the latest move in a frenzy of attempted mergers among health insurers. Anthem upped its bid to $47.5 billion for all Cigna outstanding shares. Anthem is making the cash-and-stock offer public in an effort to put pressure on Cigna through its shareholders.
Anthem’s pursuit of Cigna comes as Cigna and others are eyeing Humana Inc., which has put itself up for sale. Aetna Inc., in the last few days, made a takeover proposal to Humana. It isn’t clear how much Aetna indicated it would pay. UnitedHealth Group Inc., meanwhile, recently made a takeover approach to Aetna.
The five big managed-care companies are jockeying for deals that will enable them to respond to changes in the health care landscape brought on by the Affordable Care Act and other industry developments. Analysts say it is likely regulators will only allow one or two such combinations.
Anthem made a number of bids for Cigna in June, according to a letter Anthem Chief Executive, Joseph Swedish, sent to Cigna’s board Saturday. The letter was released by Anthem. Among other things, it details disagreement the two sides have over the role Cigna CEO David Cordani would play in a combined company. He wants to be CEO, if not immediately then after a period of time, which Anthem refuses to guarantee.
A combination would vault Anthem, the nation’s second-largest health insurer, closer to UnitedHealth in size. Cigna’s revenue last year totaled $34.9 billion, while Anthem’s was $73.9 billion. UnitedHealth had revenue of $130.5 billion, including its health-services arm, Optum, while Aetna’s was $58 billion and Humana’s was $48.5 billion.
As always, ADVOCATE will keep you up to date on this and all issues impacting radiology as they become available.
Kirk Reinitz, CPA