Centene To Acquire WellCare In Cash And Stock Deal; Deal Valued At $17.3 Bln

(RTTNews) - Centene Corp. (CNC) and WellCare Health Plans, Inc. (WCG) announced that Centene will acquire WellCare in a cash and stock transaction for $305.39 per share for a total enterprise value of $17.3 billion. WellCare shareholders will receive a fixed exchange ratio of 3.38 shares of Centene common stock and $120 in cash for each share of WellCare common stock. Upon completion of the transaction, Centene shareholders will own approximately 71% of the combined entity, with WellCare shareholders owning approximately 29%. The companies expect to complete the transaction in the first half of 2020.

Centene Corp. expects the deal to generate adjusted diluted earnings per share accretion of approximately mid-single digits in year two following closing, with long-term growth opportunities and cost reduction across markets and products. The company expects the transaction to be slightly dilutive to adjusted earnings per share in year one. The combination is expected to generate approximately $500 million of annual net cost synergies by year two.

After the close of the transaction, Michael Neidorff will lead the combined company as Chairman and CEO. Ken Burdick and Drew Asher are expected to join the Centene senior management team in new positions created as a result of the acquisition.