Cigna acquires Great-West Healthcare for $1.5B
PHILADELPHIA - Health insurer Cigna Corp announced this morning that it has signed a definitive agreement to acquire Great-West Healthcare for $1.5 billion, to expand healthcare coverage to include employer groups of all sizes.
Denver-based Great-West Healthcare is the healthcare division of Great-West Life & Annuity Inc. The company has 3,750 employees and currently serves 2.2 million covered lives, including approximately 1.5 million medical members in its employer segments.
Under the terms of the agreement, Cigna will pay approximately $1.5 billion in cash to Great-West Life & Annuity and fund approximately $400 million of additional capital to support the acquired business.
The transaction is expected to close during the first half of 2008.
The acquisition is inclusive of Great-West Healthcare's full portfolio of health and group insurance offerings and the supporting information technology infrastructure.
Great-West Healthcare's products include traditional managed care PPO, POS, HMO and Open Access plans, as well as consumer-driven health care products such as HRAs and HSAs, and are offered in association with a range of flexible funding options.
Great-West Healthcare's offerings will be added to the Cigna portfolio to complement its current range of health benefits and related specialty products and services, expanding the choices it offers.
"Cigna intends to build on Great-West Healthcare's competitively differentiated offerings to expand its operations and create near-term and long-term growth opportunities," said H. Edward Hanway, Cigna chairman and chief executive. "This transaction will broaden our distribution reach and provider network in key geographic areas of the country, particularly the Western regions of the United States, and expand the range of health benefits and products we offer employers and their employees," he said.
Cigna anticipates the acquisition to be accretive to its 2008 earnings per share outlook of $4.00 to $4.20 per share.
