Centene and Health Net to merge in a $6.8-billion transaction

Centene Corporation and Health Net Inc. announced today that the board of directors from each company has unanimously approved a definitive agreement for Centene to acquire all shares of Health Net.

The stock and cash transaction of the combination is valued at approximately $6.8 billion, including the assumption of around $500 million in debt.

The combination of Centene and Health Net would create a leading multi-national healthcare enterprise with more than 10 million members across the country and estimated 2015 pro forma premium and service revenues of approximately $37 billion.

"We are pleased to have reached this agreement with Health Net, which we believe will create value for both Centene and Health Net shareholders and will enhance our ability to serve our members and work with our providers and government partners," Centene's Chairman, President and CEO Michael F. Neidorff said. "Over the past five years, Centene has achieved record performance and today's announcement is a significant next step in our strategy to increase scale and drive geographic and product diversification. This transaction ensures that we extend our competitive position as one of the largest plans covering government-sponsored programs in the country.”

Upon completion of the transaction, Centene shareholders will own approximately 71 percent of the combined entity, with Health Net shareholders owning approximately 29 percent. The transaction is expected to be significantly accretive to Centene's diluted earnings per share in the first year following closing.