Centene Corporation (NYSE: CNC) has been on an upward trajectory for the past 3 months. Yesterday, the company announced that the Illinois Department of Insurance had approved its indirect acquisition of WellCare Domestic Insurers. However, completion of the deal was subject to clearance under the law. The law in question is the Hart-Scott-Rodino act which stipulates the legalities around divestitures of companies in Illinois and Nebraska.
According to Centene’s chairman and CEO, Michael Neidorff, the company is now a step closer to merging the two high growth entities. He added that, they were now focused on finalizing on all remaining milestones required for the deal to go through. Through this merger, Neidorff believes that they can offer their members easier access to top-quality healthcare and do so affordably.
Under the deal, Centene will pay $17.3 billion as agreed in March 2019. Once it goes through, the deal will create a market leader in Medicaid, Medicare among other aspects of health insurance. Once the deal goes through, the new business will have a membership of more than 12 million Medicaid members and 5 million Medicare members. Essentially, it will have a total of 22 million customers across the country.
The merger transaction between the two companies has already been approved by the insurance and healthcare departments in 26 States. Centene has stated that this is an opportunity to grow its presence in the Medicare advantage business. It had already acquired another company, Aetna, which gave it access to Aetna’s health insurance business.
Looking at the charts, the stock was trading between $59.23 and $60.22 and closed the day at $60.02. Volumes in the day stood at 2.73 million.
About Centene Corporation
Centene Corporation is a multinational healthcare company. It offers insurance companies to under-insured individuals in the U.S, and has its headquarters in St. Louis, Missouri.