Health insurer Aetna, Inc. (AET) announced Tuesday the completions of its acquisition of managed healthcare company Coventry Health Care, Inc. (CVH). The company also raised its operating earnings guidance for the full-year 2013, citing the completion of the Coventry acquisition.
"The successful completion of our acquisition of Coventry presents new opportunities for Aetna and supports our strategy for growth in the changing health care marketplace. Together, we are well positioned - competitively, strategically and financially - to meet the evolving needs of the people we serve," Aetna's Chairman, President and CEO Mark Bertolini said in a statement.
Aetna agreed in August 2012 to acquire Coventry Health Care for $7.3 billion, including assumption of debt. The deal will position Aetna as a major player in the government-financed health care business. Under Obama's healthcare reform law, Medicaid is set to expand from 2014.
The deal will boost Aetna's mix of business in higher-growth Government programs. Following the closure of the deal, Aetna has added about 3.7 million medical members and 1.5 million Medicare Part D members.
Further, Aetna's Medicaid business has grown from 1.1 million members to more than 2 million members, and its Medicaid footprint has expanded to 16 states from 12.
Aetna has now raised its fiscal 2013 operating earnings guidance to a range of $5.70 to $5.85 per share from the prior forecast of $5.50 to $5.60 per share. Street is currently looking for full-year 2013 earnings of $5.58 per share.
"An integral part of Aetna's growth strategy is to enhance the depth and breadth of our core insurance business while increasing our presence in the fast-growing government sector, all toward expanding our relationships with local providers. Coventry helps us realize these goals," Bertolini added.
In Tuesday's regular trading session, AET is currently trading at $58.74, up $0.04 or 0.09% on a volume of 0.57 million shares.
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