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NEW YORK (Reuters) – The US health insurer Centene Corp is in advanced talks to buy the smallest rival, WellCare Health Plans, according to two people close to the case.
If the negotiations are successful, an agreement could be reached in early April, said the people. The terms of an agreement could not be learned immediately. WellCare's market capitalization was about $ 11.6 billion at Tuesday's close.
Negotiations were first reported by Bloomberg, and WellCare shares rose 11% in after-market transactions.
Shares of both companies fell earlier in the day after the administration of President Donald Trump stepped up his attack on the Obamacare health care law by stating to a federal appeals court that she believed the law was unconstitutional and that it should be annulled.
Centene and WellCare are among the largest insurers on Obamacare's health care awards and the Medicaid expansion, "said Ana Gupte, an badyst with SVB Leerink.
Gupte said the Obamacare program accounted for about 40% of Centene's income and somewhere in the low percentages of WellCare's teenage incomes.
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.
Report by Greg Roumeliotis, writing by Michael Erman; edited by Tom Brown and Leslie Adler
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