Insurer Aetna to buy Humana in $37B deal

FILE - In this Tuesday, Aug. 19, 2014, file photo, a sign for Aetna Inc., sits atop a building at the company headquarters in in Hartford, Conn. Health insurer Aetna Inc. has made a deal to buy competitor Humana Inc. in a $37 billion deal the companies say would create the second-largest managed care company, it was announced Friday, July 3, 2014. (AP Photo/Jessica Hill, File)

HARTFORD, Conn. (AP) — Aetna will spend $37 billion to buy rival Humana in a deal that would significantly bulk up its government business and create the nation’s second-largest health insurer

The cash-and-stock acquisition, announced early Friday, would make Aetna a sizeable player in the fast-growing Medicare Advantage business, which offers privately run versions of the federally funded health care program for the elderly and people with disabilities.

Humana is the nation’s second-largest provider of Medicare Advantage plans. It also offers state- and federally funded Medicaid coverage and Tricare coverage for military personnel and their families.

The purchase price includes a combination of cash and stock worth about $230 per share.

The combined company may not retain its title of second-largest insurer for long. Health insurers have been pushing to consolidate for weeks, in part due to the health care overhaul’s impact on the industry. Blue Cross-Blue Shield carrier Anthem has made a $47 billion offer for another insurer Cigna.

On Thursday, Medicaid coverage provider Centene announced a deal $6.3 billion deal to acquire Health Net.

Health insurers can quickly diversify their products with a big deal, and they improve their technology capabilities and can save money by combining back-office functions. provides commenting to allow for constructive discussion on the stories we cover. In order to comment here, you acknowledge you have read and agreed to our Terms of Service. Commenters who violate these terms, including use of vulgar language or racial slurs, will be banned. Please be respectful of the opinions of others and keep the conversation on topic and civil. If you see an inappropriate comment, please flag it for our moderators to review.

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