|WellPoint Announces Definitive Agreement to Acquire Amerigroup|
|INDIANAPOLIS & VIRGINIA BEACH, Va.–(BUSINESS WIRE)–Jul. 9, 2012– WellPoint, Inc. (NYSE: WLP) and Amerigroup Corporation (NYSE: AGP) announced today that they have entered into a definitive agreement through which WellPoint will acquire Amerigroup, one of the nation’s leading managed care companies that is focused on meeting the health care needs of financially vulnerable Americans. This combination brings together two premier organizations with a common goal of creating better health care quality at more affordable prices for their customers. The acquisition also advances the companies’ capabilities to more effectively and efficiently serve the growing Medicaid population, including the expanding dual eligible, seniors and persons with disabilities (SPD), and long-term services and support markets (LTSS).
The transaction is valued at approximately $4.9 billion.
“We believe that this combination will create an industry leader in the government sector serving Medicaid and Medicare enrollees. This is an opportunity to capitalize on the strengths of both companies to better serve our members and position our companies for future growth as the health insurance industry changes and as we prepare for health insurance exchanges,” said Angela F. Braly, chair, president and chief executive officer of WellPoint. “Amerigroup has an excellent management team, a history of disciplined membership growth, and a proven track record in working with state and federal governments and the provider community to improve health care costs and quality for its customers. I am delighted to have not only Jim Carlson’s continued leadership, but also other members of Amerigroup’s senior team to help lead these efforts at WellPoint.”
States are looking increasingly to managed care as a solution to more effectively operate their Medicaid programs because of the increasing evidence of its value proposition. Additionally, the dual eligible, Medicaid SPD and LTSS markets present significant opportunities to help improve value in the entire Medicaid system, especially for people who are dealing with chronic or highly acute medical conditions. Amerigroup’s deep experience and leading LTSS programs combined with WellPoint’s CareMore subsidiary’s services and care management model for chronically ill and frail members, enhances the ability to improve the quality of care for these members while holding down cost increases.
“Today’s health care arena is more transformative than ever and companies must have broad capabilities to succeed,” said James G. Carlson, Amerigroup’s chairman and chief executive officer. “In 14 states, WellPoint has the most powerful brand in the health care industry and we are looking forward to adding our experience and reputation to their capabilities.”