US .. The health insurance company Centene confirmed on Wednesday that it would buy WellCare Health Plans in a cash and equity agreement to save its state-funded health care and value its smaller competitor of $ 15.27 billion.
Reuters had reported on Tuesday that the companies were in advanced talks on a deal.
Shares in WellCare jumped 23 percent and were currently trading 12.5 percent higher at $ 260.28, while those in the Centes fell about 7 percent before the clock on Wednesday.
The acquisition would probably reduce the Centers' reliance on the Obamacare health care exchange at a time when Trump's administration has intensified its attack on former President Barack Obama's healthcare law's signature.
Earlier this week, the Ministry of Justice supported a federal judge's decision that Obamacare violated the US constitution because it required people to buy health insurance.
Centers rely on their business in Obamacare for about 40 percent of their revenues, m It was according to Chief SVB Leerink analyst Ana Gupte.
The agreement for WellCare could also allow the Centes to better compete against major competitors UnitedHealth and CVS Health following a wave of consolidation that swept across the United States Healthcare sector.
Later last year, pharmacy distributor CVS Health Corp. stopped its $ 69 billion acquisition of Aetna Inc, while health insurance company Cigna Corp completed its $ 54 billion Express Scripts Holding Co. agreement.
The Centers deal, expected to close in the first half of 2020, would allow it to increase its Medicaid business and save costs as well as expand to Medicare Advantage, which is currently a small segment for the company, Bernstein said. analyst Lance Wilkes in a pre-deal note.
The deal, including debt, was valued at $ 1
WellCare shareh seniors will receive 3.38 shares of the Centes shares and $ 120 in cash for each WellCare share, and owns around 29 percent of the new company.
According to the agreement, the Centers would have around 22 million members in the United States and would generate about $ 500 million of annual cost savings within the second year after the closure, the two companies said in a statement.