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Anthem offers $184 for Cigna share

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Staff writer ▼ | June 22, 2015
Anthem has submitted a non-binding proposal to acquire Cigna Corporation for $184 per share in cash and stock.
Possible acquisition   53 million combined medical members
The proposed combination would create a premiere health benefits company with critical diversification and scale to lead the transformation of health care delivery for consumers. The combined company would be an industry leader with greater than $115 billion in annual revenues, based on the most recent 2015 outlook publicly reported by both companies.

Together Anthem and Cigna would gain meaningful diversification covering approximately 53 million combined medical members and strong commercial, government, consumer and specialty franchises.

Under the terms of the proposal, which was delivered to Cigna’s Board of Directors, Cigna stockholders would receive a total consideration that represents a value of $184 per share.

The offer, which values the company at $53.8 billion on an enterprise basis, represents an “unaffected” premium to Cigna’s stockholders of more than 35.4%, based on the closing price of Cigna’s shares on May 28, 2015.

Under the contemplated terms, the consideration would consist of approximately 31.4% Anthem shares and 68.6% cash and the combined company would reflect a pro forma equity ownership comprised of approximately 76.3% Anthem shareholders and approximately 23.7% Cigna stockholders. Anthem is also confident in its ability to complete any financing related to the acquisition.

Anthem expects the combination would be accretive to operating earnings per share and that the combined enterprise would generate significant annual cost synergies by achieving operating and G&A efficiencies.

Anthem expects to achieve adjusted earnings per share accretion of greater than 10% in year one, with the accretion more than doubling by year two following the closing of the transaction. Anthem is confident in the achievability of synergies and is committed to retaining investment grade debt ratings.

Anthem is confident in its ability to obtain regulatory approvals. Cigna rebuffed Anthem Inc's merger proposal on Sunday, saying it was "deeply disappointed" with Anthem's recent actions and the offer was not in the best interest of shareholders.