The deal will merge the rival companies and generate revenue of $115 million per year.
A deal has been finalized by Aetna the health insurance company to buy out its rival company Humana for a whopping price of $37 Billion. Aetna will be acquiring all the shares of Humana in exchange of cash and their own shares. A Humana share will be valued at roughly $230 by Aetna which is 23 percent more than even the closing price Humana came up with on Thursday to close the deal.
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The new company produced from the merger of Aetna and Humana will contain more than about 33 million members and will generate big finances such as approximately %115 Billion per year. About 56 percent of the estimated $115 billion will be generated from Government sponsored programs such as Medicare.
The CEO of Aetna Mark Bertolini believes the combination of their companies will allow them to invest in excellent services for their members to provide higher quality care at an affordable price.
However, sadly on Thursday just before the deal was announced the shares of both Aetna and Humana fell about 3 percent but if the deal goes ahead without any further problem Bertolini will serve as the CEO of the merged entity, reported CNN Money.
The merger is just another one since the inception of Obamacare, which allows health care for all American citizens. Aetna and Humana are just another in a long list of companies merging in the health care industry since Obamacare put a lot of pressure on profits.
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However some doctors have shown concern all the power will be put in just a few hands as a result of the mergers of insurance companies. Big insurers can lead to reduction of doctors and hospitals due to network coverage.