Insurers Anthem, WellPoint to merge in $16 billion deal

Monday, October 27th 2003, 12:00 am
By: News On 6

INDIANAPOLIS (AP) _ Health insurer Anthem Inc. is buying bigger rival WellPoint Health Networks Inc. for about $16.4 billion in cash and stock in a deal that would combine the nation's two largest Blue Cross Blue Shield companies.

The new company would cover nearly 26 million people and operate in 13 states, including Maine.

Indianapolis-based Anthem, second-largest Blue Cross provider, will pay those who own shares in its larger rival $23.80 in cash and one share of Anthem common stock per WellPoint share.

Anthem closed at $77.26 a share on Friday on the New York Stock Exchange, boosting the value of the offer to $101.06 a share. That is a 20 percent premium over WellPoint's share price of $83.93 on Friday.

The combined company's name will be WellPoint Inc., with the corporate headquarters in Indianapolis.

``This merger creates the nation's leading health benefits company with an outstanding opportunity to set the industry standard and better serve our members, employer groups, physicians and hospitals, agents and brokers, and our communities,'' said Leonard Schaeffer, chairman and chief executive officer of WellPoint.

Anthem has about 11.8 million members, about 2 million below the membership of Thousand Oaks, Calif.-based WellPoint.

Anthem is the Blue Cross and Blue Shield licensee in nine states: Indiana, Kentucky, Ohio, Connecticut, New Hampshire, Colorado, Nevada and Maine, and part of Virginia.

WellPoint operates in California, Georgia, Missouri and Wisconsin.