Aetna Inc. (AET) is open to an acquisition of any size as long as it’s a “strategic fit,” the health insurer’s chief financial officer said, amid multibillion dollar deals by rivals including WellPoint Inc. (WLP) and Cigna Corp. (CI)
Aetna, the third-biggest U.S. health plan, can access financing to pull off a purchase even after approving $750 million in additional share repurchases last week, CFO Joseph Zubretsky said today in a telephone interview.
WellPoint said this month it would buy Medicaid insurer Amerigroup Corp. (AGP) for $4.9 billion, and Cigna bought Medicare specialist Healthspring Inc. for $3.8 billion in January. While Aetna sees other Medicaid-management companies as too expensive right now, the Hartford, Connecticut-based company isn’t swearing off similar deals, Zubretsky said.
“We’re agnostic as to size,” he said. “And we can use our balance sheet and the capital markets to advance something bigger. It’s just a question of strategic fit.”
Aetna declined 2.9 percent to $36.06 at the close in New York. The company’s shares have declined 15 percent this year.
Medicare is the U.S. government health plan for the elderly and disabled while Medicaid is a joint federal-state program for the poor. Medicaid insurer Centene Corp. (CNC) has risen 31 percent since WellPoint announced the Amerigroup purchase July 9. WellCare Health Plans Inc. (WCG), which specializes in both programs, has gained 23 percent.
WellCare is based in Tampa, Florida, while Centene is based in St. Louis. WellPoint is based in Indianapolis.
Zubresky said recent deals have been made by rivals that needed to diversify.
via Aetna ‘Agnostic’ on Acquisition Size, CFO Zubretsky Says – Bloomberg.