(Bloomberg) — UnitedHealth Group Inc. (NYSE:UNH) agreed to buy Catamaran Corp. (Nasdaq:CTRX) for about $12.8 billion, bulking up its drug-benefits business to get better negotiating power in talks with pharmaceutical companies over prices.
UnitedHealth will pay $61.50 a share, financing the acquisition with cash and debt, the companies said in a statement. The offer, which would be UnitedHealth’s largest purchase ever, is 27 percent more than Catamaran’s closing share price of $48.32 on Friday.
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Companies that provide health insurance to their employees are becoming more reliant on drug-benefit managers to help rein in the rising cost of medications. Express Scripts Holding Co., the biggest in the industry, successfully led a campaign last year to push for discounts on $1,000-a-day treatments for hepatitis C from drugmakers Gilead Sciences Inc. and AbbVie Inc.
The deal lets UnitedHealth bet more on growth in drug benefits as the initial surge of new health-insurance customers from Obamacare begins to slow. The biggest U.S. health insurer will combine Catamaran with its drug-benefit unit, called OptumRX, giving it a broader base of customers.
Optum “has largely been servicing United’s captive business,” said Ana Gupte, an analyst at Leerink Partners. “They have aspirations to broaden that.”
UnitedHealth rose 4.2 percent to $122.94 in early trading. Catamaran gained 24 percent to $60.03.