WellPoint to acquire Amerigroup Corp. in Medicaid expansion
INDIANAPOLIS, July 9, 2012—WellPoint, Inc., the nation’s second largest insurer, has entered into an agreement to acquire Amerigroup Corp., one of leading managed care companies for Medicaid patients in the United States.
Under terms of the agreement, WellPoint will pay $92 per share in cash to acquire all of the outstanding shares of Amerigroup for a transaction value of about $4.9 billion.
“We believe that this combination will create an industry leader in the government sector serving Medicaid and Medicare enrollees,’’ Angela F. Braly, chair, president and CEO of WellPoint, said in a prepared release. The company noted that states are turning to managed care to operate Medicaid programs, which are expanding under the Affordable Care Act.
When the deal is completed, WellPoint, with its affiliated Medicaid plans, will serve more than 4.5 million beneficiaries of state sponsored health care programs. Its Medicaid footprint will include 19 states.
The acquisition is expected to close in the first quarter of 2013 and is subject to state regulatory approvals.