Anthem to buy Cigna in $54.2 billion deal

Health giant Anthem announced Friday it has agreed to buy rival Cigna at a valuation of $54.2 billion, further consolidating the nation’s largest health insurers.

{mosads}A combined company would have expected revenues of $115 billion and provide approximately 53 million consumers with healthcare coverage, making it the largest health insurer in the nation by size of members covered.

Anthem will pay $188 a share in cash and stock, a 38.4 percent premium on Cigna’s closing price at the end of May. Cigna shareholders will receive $103.40 per share in cash and 0.5152 shares in Anthem stock.

Anthem President and CEO Joseph Swedish, who would serve as CEO under the combined company, said in a statement that the transaction would put the company in a more competitive position with a broader network.

The deal comes after Aetna, another insurer, agreed to purchase smaller rival Humana earlier this month for $37 billion in stock and cash, putting it near the No. 2 spot among the nation’s largest healthcare insurers.

If both transactions are completed, the number of major health insurance providers in the U.S. will shrink to three, including UnitedHealth Group.

The Anthem-Cigna deal, which is subject to shareholder and regulatory approval, is expected to be finalized in the second half of 2016.