Indianapolis-based Anthem Inc. (NYSE: ANTM) has acquired one of its largest competitors, Cigna Corp. (NYSE: CI), in a $54 billion deal. Anthem Chief Executive Officer Joe Swedish will lead the combined company. Cigna CEO David Cordani will serve as president and chief operating officer. Anthem says the acquisition will create an industry leader with approximately 53 million members and $115 billion in revenue. The transaction is expected to close in the second half of 2016.
Under terms of the deal, the Anthem Board of Directors will expand to 14 members. Cordanie and four members of Cigna's current board will join the nine current member's of Anthem's board.
Swedish says the deal will deliver "meaningful value to consumers and shareholders." He says it will result in expanded provider collaboration, superior innovation and enhanced affordability. Swedish believes Cigna's capabilities "greatly complement our own" and says the combined company will be competitive in the commercial, government, international and specialty markets.
The road to the acquisition has been rocky at times. Last month, Cigna said executives were "deeply disappointed" by Anthem's public play for the company. One of the main sticking points was the proposed executive structure. At the time, Swedish said the company submitted four written proposals, with one as high as $184 per share in cash and stock, which was higher than requested by Cordani.
The final price ended up being $188 per share, which includes $103.40 per share in cash for Cigna shareholders and 0.5152 shares of Anthem stock for each Cigna share.
Swedish says the combination will have a geographic footprint that currently represents half of all Medicare enrollments in the United States.