Article # 4 (due 10-19) – Essay Example
Article 4 WellPoint to Acquire Amerigroup amid Health Care Overhaul By Abelson, Reed. & Merced, Michael; Published 9 July http dealbook.nytimes.com/2012/07/09/wellpoint-to-buy-amerigroup-for-4-9-billion/
As indicated by the authors, there has been ongoing health care overhaul that has continued to affect any kind of acquisition and mergers in the country. According to the article, WellPoint decided to buy Amerigroup in a deal valued at $4.9 billion in total cash. The national insurer sought to take advantage of the expansion in the health care as promoted by the Obama Administration.
As stated in the article, WellPoint is today one of the leading insurers with better health insurance covers under Blue Shield and Blue Cross brands. Currently, it is operating in thirteen states in the country. The move to purchase Amerigroup will definitely bolster the company’s presence in financing Medicaid for the low-income persons and Medicare for those persons who are considered to be disabled and elderly members of the society.
With the combined efforts, it is worth noting that Medicaid will manage to promote its health care to 19 states in the country. At the same time, WellPoint continues to pay a significant premium towards its business expansion. The authors identify that the company will be paying a total of $ 92 a share, and a 43 per cent premium to the acquired company. This would result in the closing price of $ 64.34. With the move in place, the company will be expecting that the deal will significantly add earning in the coming years. For instance, it anticipates adding more than a dollar for every share by 2015.I feel that such acquisition will ultimately help the citizens who seek cheaper but quality healthcare services.
Abelson, Reed. & Merced, Michael. WellPoint to Acquire Amerigroup Amid Health Care Overhaul, New York Times.