Aetna will pay $42.08 for each Coventry share, representing a 20 percent premium on the company’s closing price of $34.94 on Friday, the Associated Press reported.
The deal, Reuters noted, will boost Aetna’s customer base by more than five million members and increase the proportion of total revenue from government business to 30 percent from 23 percent currently.
“Integrating Coventry into Aetna will complement our strategy to expand our core insurance business, increase our presence in the fast-growing Government sector and expand our relationships with providers in local geographies,” said Mark T. Bertolini, chairman, chief executive and president of Aetna, in a statement.
There has been a wave of consolidation in the insurance industry as President Barack Obama attempts to expand health care coverage in the country to more low-income people.
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WellPoint said last month it would buy Amerigroup, a manager of publicly funded health programs, for about $4.9 billion, the New York Times reported.
In October, Cigna agreed to pay $3.8 billion for HealthSpring to boot its Medicare business, Fox Business reported.