By Roland Jones
WellPoint is aiming to profit from the Supreme Court?s recent decision to uphold most of President Barack Obama?s health care law.
The health insurer said Monday it will buy rival Amerigroup for about $4.9 billion in a bid to capture a larger share of the growing number of recipients of the Medicare and Medicaid health care programs.
The deal follows the U.S. Supreme Court?s decision to uphold Obama?s healthcare legislation, which requires all Americans to have health insurance. It is expected to increase the number of Americans who have access to state-sponsored health care programs.
WellPoint said the transaction will, upon completion, allow the combined company to serve more than 4.5 million beneficiaries of these health care programs and allow WellPoint to increase its footprint to 19 states.
In early June WellPoint, which is looking to diversify its sources of revenue, agreed to acquire contact lens retailer 1-800 Contacts from private equity company Fenway Partners.
The Amerigroup acquisition is expected to close in the first quarter of 2013 and will be financed with cash, commercial paper and new debt, the companies said.
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