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The US health insurer Centene will buy the weaker plans of its rival, WellCare Health Plans, for $ 15.27 billion.
The companies said on Wednesday that the deal, including the debt, was valued at $ 17.3 billion. The offer of $ 305.39 per share represents a premium of about 32% over the closing price of WellCare on Tuesday.
Reuters said Tuesday that companies were in advanced talks about a merger.
WellCare's market capitalization was about $ 11.6 billion at Tuesday's close.
Negotiations were first reported by Bloomberg, and WellCare shares rose 11% after Wednesday's trading session.
Shares of both companies fell a little earlier in the day after President Donald Trump 's administration attacked more and more the Affordable Care Act, known as Obamacare, in September. declaring to a Federal Court of Appeal that the Health Care Act was unconstitutional and should be rescinded.
An agreement for WellCare would help reduce Centene's reliance on attracting members of Obamacare Health Bursaries and better compete with UnitedHealth and CVS Health.
The badyst of SVB Leerink, Ana Gupte, said the Obamacare program accounted for about 40% of Centene's revenues, while it was only in the lowest percentages of WellCare's revenues. WellCare focuses more on the Medicare and Medicaid plans, public health programs for the elderly and the poor.
Companies could also realize cost savings in the states where they both operate, such as Florida, Georgia, Illinois, and Missouri.
As part of the regular trading on the NYSE on Tuesday, WellCare shares closed down about 3.9% to 231.27 dollars, while Centene shares also fell 3.9% to $ 54.85.
–CNBC contributed to this report.
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