US health insurance deal action as Centene buys Health Net, Athem and Cigna talk merger

Anthem and Cigna in merger talks

US health insurer Centene has agreed to acquire rival Health Net for $6.3bn, while elsewhere in the sector reports suggested Anthem and Cigna had met for merger talks.

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Unitedhealth Group Inc.

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Missouri-based Medicaid provider Centene will pay a mixture of cash and stock for California-based competitor, with the acquisition price of $78.57, a 21%-premium to the previous day's closing price.

Ana Gupte, an analyst at Leerink, suggested in a note to clients on Thursday that it was possible UnitedHealth could attempt to launch a competing bid for Health Net.

The health insurance sector has been abuzz with merger and acquisition (M&A) moves in recent months, with UnitedHealth moving in on Aetna and widespread reports that Humana Inc is a target.

The Wall Street Journal reported that Anthem and Cigna had begun talks about a potential merger just weeks after Cigna rebuffed a $47.5bn takeover.

Representatives of the companies met in recent days to discuss a potential combination, according to a source quoted by the paper, with a deal possible this month.

Companies in the sector are looking to make hay having benefited from a surge of new business as the Patient Protection and Affordable Care Act pushed previously uninsured people into the market.