Insurance companies play merger acquisition games to be market leader
Humana Inc would be acquired by Aetna Inc soon. The health insurance giant is trying eliminating competition by the smaller firm. The whole deal is expected to cost massive $37 billion. The amount would be paid in stock and cash. Experts are pointing out that this is the biggest deal in the insurance sector. The combined company would now have number position in the market by membership. The Medicare Advantage Business is expected to expand three times after the deal.
The antitrust sued might be filed against the corporation due to this development. But this also means that the government would be force to go after another insurance deal between Swiss property and Chubb Corp with the help of ACE Ltd, a casualty insurance giant. Experts are saying the deal was second largest in the market. The Swiss properties reportedly paid $28 billion for the transaction. Acquisition of WellPoint by Anthem Inc in 2004 may also come under the scrutiny. The deal cost $16.6 billion.
The healthcare insurance business will boom now as Supreme Court declared ObamaCare legal once again. The sector is expected to receive more subsidies from the federal government which will boost the confidence of investors. The consumers have advantage of larger Insurance Corporation as it will have better network of doctors across the country. Cigna Corp’s merger with Anthem may create largest insurance company in country if the deal in finalized. It combined company will replace United Health Group Inc. United Health is also exploring merger options to save its top position.