Cigna, an insurance company, has signed a definitive agreement to acquire Great-West Healthcare, the healthcare division of Great-West Life & Annuity.
Under the terms of the agreement, Cigna will pay approximately $1.5 billion in cash to Great-West Life & Annuity and to fund approximately $400 million of additional capital to support the acquired business. The transaction is expected to close during the first half of 2008.
The acquisition is inclusive of Great-West Healthcare’s full portfolio of health and group insurance offerings and the supporting information technology infrastructure. Great-West Healthcare’s offerings will be added to the Cigna portfolio to complement its current range of health benefits and related specialty products and services, expanding the choices it offers, particularly to small to mid-sized employers.
Edward Hanway, chairman and CEO of Cigna, said: Great-West Healthcare will be a significant addition to Cigna. Great-West Healthcare’s talented team of employees has built the company’s reputation for strong service and innovation, and we look forward to welcoming them to Cigna.
Rick Rivers, executive vice president of Great-West Healthcare, added: Cigna’s acquisition of Great-West Healthcare combines complementary strengths in products and expertise, and will build on the strong provider relationships that are important to both organizations.