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September 27, 2005 at 08:00 PM
WellPoint Inc. has proved the rumors true and agreed to acquire WellChoice Inc. through a merger with a value of about $6.5 billion.[@@]
WellPoint, Indianapolis, is the parent of Blue Cross and Blue Shield plans in many states, including California, Ohio and Indiana, and its UniCare unit sells health coverage throughout the United States. The company provides or administers health coverage for 28 million U.S. residents.
WellChoice, New York, is the parent of Empire Blue Cross Blue Shield, a major player in the New York health insurance market. It has about 5 million medical plan members.
WellPoint says it expects to pay a little more than half of the price of the deal in common stock and half in cash.
Because of the process that WellChoice used to convert to for-profit status in 2002, the New York Public Asset Fund now holds about 52 million shares of WellChoice common stock, or 62% of outstanding WellChoice shares. The fund has agreed to vote for the WellPoint acquisition, and it will receive about $2 billion in cash and 27 million shares of WellPoint common stock in connection with the acquisition, WellPoint says.
Dr. Michael Stocker, president of WellChoice, would become president of a new WellPoint Northeastern region that would include Connecticut, Maine and New Hampshire as well as New York, WellPoint says.
WellPoint and WellChoice hope to complete the deal, which is subject to approval by federal antitrust regulators and WellChoice shareholders as well as by state regulators, by March 31, 2006.
