Health insurer WellPoint is in talks to acquire New York-based WellChoice, the parent of Empire Blue Cross Blue Shield, according to media reports. A deal has not yet been reached, but the terms of the transaction are said to be in the neighborhood of $6.5 billion in cash and stock. Industry analysts see the offer as a response to UnitedHealth Group's $8.14 billion acquisition of PacifiCare this summer. The deal would give WellPoint a strong presence on the east coast and put the company in a position to challenge UnitedHealth Group by competing with its rival's subsidiary, Oxford Health plans.
One potential road block: about 60 percent of WellChoice is owned by a trust fund maintained by the State of New York, created in 2002 when the company was allowed to transition from non-profit to for-profit status.
- see this story from The New York Times