It's a done deal: On Nov. 30, 2000, Aetna shareholders signed off on the $7.7 billion sale of the company's financial services and international divisions to the Dutch financial giant ING Group N.V.
The sale will further ING's goal of becoming the largest life insurance company in the United States.
Nearly 72 percent of Aetna's shareholders voted in favor of the deal that will allow the insurer to spin off its domestic health care business, according to spokesperson Fred Laberge. The new entity, formerly called Aetna U.S. Healthcare Inc., will operate as Aetna Inc. with headquarters in Hartford, Conn., and other major offices in Blue Bell, Penn., and Middletown, Conn.
Under the terms of the sale, Aetna shareholders will receive $5 billion in cash, or $35 per share, and ING will take on $2.7 billion of Aetna's debt, leaving the new Aetna will approximately $2 billion in total debt.
Shareholders will also receive one share of the new Aetna's common stock for each share of their old stock. While Aetna stock closed at $67 per share on Nov. 30, 2000, the market price for the new stock is unknown.
Aetna Chairman William H. Donaldson tried to rally the troops' enthusiasm for the future of the new Aetna at the shareholders' meeting. He told them the new company will "emerge stronger and more competitive" as a result of the ING sale. However, most shareholders who spoke at the meeting said they were opposed to the deal.
Many echoed one woman's concern that the new Aetna was putting "all our eggs in one basket" and that the basket — the volatile health care market — was a flimsy one. Others said they're saddened by the loss of the company's reputation among employees and members of the community as a benevolent corporate benefactor, once known as "Mother Aetna" for its many charitable acts.
"Mr. Chairman, how did we get to this?" |
"It troubles me that Aetna's stature is so much less," said retiree Alyce Rawlins of Manchester, Conn. "And now my pension is in a company that is just health care. Mr. Chairman, how did we get to this?"
In what was to become an often-repeated theme during the meeting, Donaldson replied, "I don't want to dwell on the past. We have to concentrate on what we're faced with today." However, the chairman's remarks did not reassure at least one shareholder, who reminded him that "those who ignore the past are condemned to repeat it."
The past five years have been a roller coaster for Aetna. The company's stock dropped from a near $100 high in 1999 to less than $40 a share in February 2000. It has also been hobbled by rising medical costs and numerous class action lawsuits. A filing by Aetna to the United States Securities and Exchange Commission that was made available to the shareholders contains five pages that document all the pending litigation against the insurer.
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