The UnitedHealth Group said it will acquire PacifiCare Health Systems in a deal worth $8.1 billion. The move immediately strengthens UnitedHealth's position in California, giving the provider 3 million additional members on the West Coast. Analysts said PacifiCare's thriving Medicare business was a major motivating factor for the Minnetoka, Minnesota-based health insurance giant. Medicare programs are expected to become a major profit center for managed care providers next year when the Medicare prescription drug benefit goes into effect.
UnitedHealth is the nation's second-largest health insurance company, trailing only WellPoint in total subscribers. Assuming regulators approve the deal, UnitedHealth will now have 26 million subscribers to WellPoint's 28.3 million. PacifiCare shares rose 6 percent to $77.09 in afternoon trading on Wednesday.
- see this story from The Wall Street Journal (sub. req.)
PLUS: Omnicare, a provider of pharmaceuticals and other services to long-term care facilities, said today it is buying rival Neighborcare for $1.55 million. Story