Michael Neidorff, chairman and chief executive officer of Centene Corp., listens during a Bloomberg ... [+]
Shareholders of Centene and WellCare on Monday gave their blessing to the merger of the two health insurers in a deal that will create a national player in administering government-subsidized health benefits for millions of Americans.
The shareholder approval by both companies at separate meetings is a big milestone for the deal given there were reports some hedge funds wanted Centene to consider other options. Centene two months ago announced plans to buy WellCare for more than $15 billion in a deal that would expand the business of administering Medicaid benefits for poor Americans as well as private Medicare Advantage coverage.
On Monday, Centene said about 85% of the outstanding shares of Centene common stock voted with "over 99% voting to approve the issuance of Centene common stock in connection with the acquisition." Meanwhile, about 83% of the shares of WellCare outstanding common stock voted "with 99% voting in favor of the adoption of the merger agreement," the companies said.
"We are pleased that Centene stockholders overwhelmingly support the recommendation of the board of directors on the pending combination with WellCare and have voted in favor of the transaction," Centene chairman and CEO Michael Neidorff said. "With the addition of WellCare, we are creating a combined company that is better able to serve members and help them achieve better health outcomes. Centene and WellCare will continue to move forward with federal and regulatory approvals with a focus on improving quality for recipients, fair compensation for providers and savings for states."
The deal still has many hurdles to clear, including clearance by 26 state insurance regulators as well as necessary approvals by the U.S. Justice Department that recently asked for more information about the merger. "To date, all required Form As and Form Es have been filed, and conditional approvals have been obtained in four states—Alabama, Arkansas, Kentucky and Missouri," Centene said.
The companies say they expect the deal to "be completed by the first half of 2020."
