St. Louis-based health insurer Centene (NYSE: CNC) has agreed to purchase managed healthcare services contractor Health Net (NYSE: HNT) for $6.3 billion in cash and stock and will also assume $500 million in debt.
Centene said Thursday the price of the deal is $78.57 per share, which represents a premium of 21 percent over the Wednesday closing stock price of GovCon Index-listed company Health Net, which is based in the Los Angeles neighborhood of Woodland Hills.
The companies expect the deal to create a combined business with $37 billion in fiscal year pro forma revenue and 10 million members.
Centene said it intends to expand its presence in federal healthcare programs such as Medicare, Tricare and initiatives of the Department of Veterans Affairs through the transaction.
The transaction is subject to the approvals of both sets of shareholders, state insurance and healthcare regulators and to antitrust review, Centene said.
Health Net stockholders will receive $28.25 in cash for each share they hold and 0.622 shares in Centene upon closure of the deal, which will give Centene shareholders 71 percent of ownership in the combined company and Health Net with the remaining 29 percent.