The $37 billion will be in the form of cash and stock, and when the deal goes through, Aetna’s Medicare Advantage business will nearly triple. Before the deal goes through, it will face antitrust scrutiny.
The terms of the agreement was approved by the board of directors at each company, and under this agreement Humana stockholders will receive $125 in cash and 0.8375 Aetna common shares for each Humana share.
Over the past decade, enrollment in Medicare Advantage plans has tripled to around 16 million people and that number is expected to increase. After the acquisition is completed, Aetna will become the largest provider of Medicare Advantage coverage.
Aetna, based in Hartford, CT, announced the deal just a day after Centene Corp. announced that it was going to buy insurer Health Net for $6.3 billion. That deal will help the Centene expand in California, the largest Medicaid market, and it will give Medicare presence in a number of Western states.
In addition to these deals, last month Blue Cross-Blue Shield carrier Anthem went public with an offer of more than $40 billion for Cigna, another insurer.
