The US insurance giant Aetna will acquire managed health care company Coventry in a transaction valued at $7.3 billion, the two companies announced early Monday.
Under the terms of the agreement, which has been approved by the board of directors of each company, Coventry stockholders will receive $27.30 in cash and 0.3885 Aetna common shares for each Coventry share, according to a statement issued by the two firms.
The acquisition is projected to add nearly 5.5 million regular and Medicare clients to Aetna's membership, company officials said.
"Integrating Coventry into Aetna will complement our strategy to expand our core insurance business, increase our presence in the fast-growing Government sector and expand our relationships with providers in local geographies," said Mark Bertolini, Aetna's chairman, chief executive and president.
He added that a larger capital base would also enhance Aetna's ability to continue to invest in innovation, new technologies and capabilities.
Coventry chairman and CEO Allen Wise said the combined businesses will be positioned to better serve a broader market and develop new partnerships.
"We look forward to working together to build upon the strengths of each company to take advantage of opportunities during this dynamic time for our industry," Wise said.
Coventry, which is based in Bethesda, Maryland, provides Medicare and Medicaid programs as well as group and individual health insurance. It currently serves approximately five million individuals in all 50 US states.
Aetna is one of leading US health insurance companies, serving approximately 36.7 million people.