Centene Corp. says it is moving ahead with well-developed plans for combining Health Net Inc. with its own operations.
Centene (NYSE:CNC), a St. Louis-based company, has closed on a deal to acquire Health Net, Woodland Hills, Calif., for a combination of cash and stock that gave the deal a value of about $6 billion.
Health Net’s stock no longer trades on the New York Stock Exchange.
Best known as a managed Medicaid company, Centene has talked about being happy with the performance of the plans it’s sold through the Patient Protection and Affordable Care Act (PPACA) public exchange system.
See also: Centene likes its PPACA exchange margins
Meanwhile, Health Net has been providing commercial coverage, Medicare coverage and TRICARE plan administration services.
The new combined company provides or administers major medical coverage for about 10 million people. When the companies first announced the deal, in July 2015, they said it would give Health Net a value of about $6.8 billion.
Dave Jones, the California insurance commissioner, said Tuesday, in an explanation of why he approved the deal, that Health Net needs Centene’s resources. ”Health Net Life has had declining market share and declines in covered lives in its commercial health insurance business,” Jones said in a statement about the approval. Rejecting the deal could have left Health Net in an unsustainable position and forced it out of the market, Jones said.
When Centene announced the deal, it said it would be moving the headquarters of the combined company in St. Louis, with Michael Neidorff, Centene’s chairman and president, serving as the chairman and president of the combined company, and Jay Gellert, the president of Health Net, helping to achieve a smooth transition.