Reuters Thu Jul 2, 2015
by Vidya L Nathan and Amrutha Penumudi
U.S. health insurer Centene Corp will buy smaller rival Health Net Inc for $6.3 billion, underscoring the healthcare industry's rush to bulk up to negotiate better prices with suppliers and hospitals, and attract new customers.
Health Net's shares touched a record high of $76.67 on Thursday, but stayed shy of Centene's offer of $78.57, which is at a 21 percent premium. Centene shares were down 3 percent at $78.42.
The deal comes a week after the U.S. Supreme Court upheld subsidies for individuals under President Barack Obama's signature healthcare law, keeping a large chunk of patients intact under the Medicare and Medicaid programs.
nsurers have said subsidies are key to bringing in new customers and the ruling has removed uncertainty for insurers looking for acquisitions. It could also spur more deal making in the health insurance sector, which has already seen a blitz of merger activity this year.