Aetna, one of the nation's largest health insurers, will buy Coventry Health Care Inc. for $5.7 billion, the companies announced Aug. 20.
The deal will enable Aetna to capture a larger share of the government-funded health insurance market and extend its reach into the small-group and individual markets. The Hartford, Conn., company will gain 5 million medical insurance and Medicare drug plan members.
Conventry, headquartered in Bethesda, Md., offers Medicare Advantage and Medicare prescription drug plans, Medicaid managed care plans, group and individual health insurance, coverage for specialty services such as workers' compensation, and network rental services.
"Integrating Coventry into Aetna will complement our strategy to expand our core insurance business, increase our presence in the fast-growing government sector and expand our relationships with providers in local geographies," Mark Bertolini, Aetna's chairman, CEO and president, said in a press statement. "Coventry has distinct capabilities and a local market focus that will accelerate our efforts to bring simpler, more affordable products to consumer insurance exchanges in 2014 and beyond."
The transaction is subject to approval by Coventry's stockholders and state insurance regulators and is expected to close in mid-2013.