Centene Corporation (CNC), a health insurer based in St. Louis, Missouri, announced on Thursday that it plans to buy Los Angeles-based Health Net (HNT) for cash and stock worth approximately $6.8 billion.
The companies said the acquisition will create a healthcare company with more than ten million members and revenues of approximately $37 billion.
The terms of the agreement will give Health Net shareholders 0.622 shares of Centene common stock and $28.25 in cash for each share of Health Net common stock.
There’s been a bit of merger mania in the healthcare industry of late as insurers turn to acquisitions as a way to reduce costs and pump up profits. Companies have benefited from the implementation of the Affordable Care Act, which has prompted an influx of new, previously-uninsured customers, but the law’s new regulations and fees are also putting pressure on profits.
Aetna, the nation’s second-largest health insurer by market value, is vying for Humana, in a deal that set to top $29 billion. Last month, Anthem Inc. said it had offered $47 billion in cash and stock for smaller rival Cigna Corp. (Cigna said the dollar figure was “deeply disappointing.”) And there are rumors that UnitedHeath could scoop up Aetna.