US-based health insurer WellPoint (WLP) has closed the acquisition of Amerigroup, in a bid to effectively serve the growing Medicaid population in the country.

The acquirer expects the acquisition of Amerigroup to boost its core business and to advance its growth potential.

Based on the agreement, Amerigroup will trade as a wholly owned subsidiary within WellPoint and will continue to manage state sponsored programs and further expand the business, while Amerigroup’s management team will oversee the united Medicaid businesses.

The consolidation of two firms will also enable them to serve dual eligible, seniors and persons with disabilities (SPD), and long-term services and support markets (LTSS), the firm said.

Under the terms of the agreement, WellPoint has paid $92 per share in cash to acquire all of the outstanding shares of Amerigroup for a transaction valued nearly $4.9bn.

WellPoint interim president and CEO John Cannon said, "The acquisition advances our ability to more effectively and efficiently serve the growing Medicaid population, including the expanding dual eligible, seniors and persons with disabilities, and long-term services and support markets."

Following the completion of acquisition, WellPoint’s affiliated Medicaid health plans now serve nearly 4.5 million beneficiaries of state sponsored health care programs in 20 US states.