NU Online News Service, Oct. 27, 2003, 5:54 p.m. EST – UnitedHealth Group Inc., Minnetonka, Minn., has agreed to acquire Mid Atlantic Medical Services Inc., Rockville, Md., for about $2.7 billion in cash and stock, or about $1,350 for each of MAMSI’s health plan members.

MAMSI manages medical care for 2 million people in Delaware, Maryland, Washington, Virginia, northern North Carolina and southeastern Pennsylvania.

Dr. William McGuire, chairman of UnitedHealth, says his company is proposing the deal to increase its market share in the mid-Atlantic region, which is home to 30 Fortune 500 employers as well as the seat of the federal government.

Together, UnitedHealth and MAMSI have about 3.5 million people in the region, UnitedHealth says.

The acquisition is subject to approval by antitrust regulators as well as shareholders and insurance regulators.

The acquisition is the second major deal that UnitedHealth has agreed to in the past six weeks.

In September, Golden Rule Financial Corp., Indianapolis, said it had agreed to an acquisition by UnitedHealth.

Standard & Poor’s Ratings Services, New York, has released a commentary on the MAMSI deal that affirms the ratings of UnitedHealth and its subsidiaries.

UnitedHealth is a strong company with high earnings and a great business position, and the MAMSI deal should help the company add about $2.5 billion in annual revenue from the mid-Atlantic markets, according to the S&P analysts.

“Standard & Poor’s believes integration risks will be offset by favorable business positioning in those markets,” the analysts write.