U.S. health insurance company Centene has announced plans to buy its rival WellCare for $15.27 billion.
The deal, valued at $17.3 billion after Centene assumes WellCare’s debts, is the latest consolidation in the health insurance space. Centene seemingly is looking to reduce its dependence on health-care exchanges that are part of the Affordable Care Act, also known as Obamacare.
The move comes just days after President Donald Trump escalated his efforts to gut the ACA, former President Barack Obama’s signature healthcare plan. On Monday, the Department of Justice said it would support a Texas judge’s controversial December ruling the ACA is unconstitutional.
“With the addition of WellCare, we expect to bolster and diversify our product offerings, increase our scale and have access to new markets, which will in turn, enable us to continue investing in technology and better serve members with innovative programs designed to meet their needs,” said Michael F. Neidorff, Centene’s chairman and CEO, in a statement.
Reuters reports that about 40% of Centene’s earnings come from its ties to Obamacare.
WellCare is less dependent on the exchanges.
The merger comes amid a wave of consolidation in the healthcare industry. Cigna last March bought Express Scripts for $54 billion. And in 2017, CVS merged with Aetna and UnitedHealth purchased DaVita.