Centene agrees to buy Health Net in $6.8 billion cash and stock deal

Centene Corp. said Thursday it has agreed to acquire Health Net Inc. in a cash and stock deal valued at about $6.8 billion, including the assumption of $500 million of debt. The combination will create a health care company with more than 10 million members across the country and 2016 proforma premium revenues of about $37 billion, Centene said in a statement. Health Net shareholders will receive 0.622 shares of Centene and $28.25 in cash for each Health Net stock, equal to a premium of about 21% over Health Net's closing price on July 1. The deal if expected to boost Centene's per-share earnings by 20% in the first year after closing. "Today's announcement is a significant next step in our strategy to increase scale and drive geographic and product diversification," Centene Chief Executive Michael Neidorff said in the statement. The deal is expected to generate annual synergies of about $150 million by the second year and to close in early 2016. Health Net shares were trading up 5.6% in premarket trade, while Centene was indicating higher in thin volumes.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.