WellPoint to buy Amerigroup for $4.9 Billion

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(Best Syndication News) - WellPoint Inc. (NYSE: WLP) announced that they have reached an agreement with Amerigroup Corporation (NYSE:AGP) to acquire them. The definitive agreement includes terms for WellPoint to pay $92.00 per share in cash to buy all outstanding shares of Amerigroup. The transaction is valued at approximately $4.9 billion.

Amerigroup is a leading managed care company that serves the government sector health care market such as Medicaid and Medicare.

Angela F. Braly, Chair, President and Chief Executive Officer of WellPoint, said that buying Amerigroup would help WellPoint be in a better position to grow and prepare for the health insurance industry changes. This would help them to prepare for the upcoming Health Care Reform Act’s health insurance exchanges.

WellPoint currently services health insurance polices in 14 states. Amerigroup has experience with LTSS markets. Once the companies merge, WellPoint will server over four-and-one-half million beneficiaries of state sponsored health care programs. WellPoint will be servicing Medicaid plans in 19 states after the transaction is complete.

The transaction is expected to be completed in the first quarter of 2013. The companies must first gain regulatory approval, and the transaction is subject to standard closing conditions.

WellPoint (NYSE:WLP) shares closed at $61.95, up $2.04 (+3.41%). Amerigroup (NYSE:AGP) shares closed at $88.79, up $24.45 (+38.00%).

By: Dave Reddy

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