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Aetna to buy Coventry in Medicare, Medicaid expansion
August 20, 2012 / 10:00 PM / 5 years ago

Aetna to buy Coventry in Medicare, Medicaid expansion

Aug 20 (Reuters) - Insurer Aetna Inc (AET.N) has signed a deal to buy rival Coventry Health Care Inc CVH.N for $5.7 billion in cash and stock, the Wall Street Journal reported, citing people familiar with the matter.

Aetna is paying $42.08 a share for Coventry, a 20.4 percent premium to Friday’s closing price, the newspaper said.

Aetna and Coventry Health Care were not immediately available for comment.

The acquisition of Coventry will help Aetna to lift its share of revenue from its government business to over 30 percent from 23 percent currently, paper reported.

Aetna expects the acquisition to add about 45 cents per share to its 2014 earnings and expects to boost its 2015 earnings by 90 cents per share, the Journal said.

(Reporting by Bijoy Koyitty in Bangalore; Editing by Edwina Gibbs)

((bijoy.koyitty@thomsonreuters.com)(within U.S. +1 646 223 8780)(outside U.S. +91 80 4135 5800)(Reuters Messaging: bijoy.koyitty.reuters.com@reuters.net)) Keywords: COVENTRYHEALTH AETNA/

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