- BP's Profit Halves but Still Beats Forecasts
- D. Bank Quarter Profits Rise, But Loan Provisions Jump
- Delphi's Board Favors Bid From Bankruptcy Lenders
- Tuesday's Test: Can Bulls Hold Their Gains?
- Toyota Eyes 2011 Launch of Hybrid Compact: Report
- Australia Economic Risks Now More Balanced: RBA
- SEC Rule on 'Naked' Short-Selling Now Permanent
- Hearings to Consider Limits on Commodity Positions
- GDP to Show Progress, but Recovery Still Uncertain
- Nicklaus Paints Bleak Picture On Golf Course Design
- Gortat Won't Be Wearing New Reeboks Next Year
- How Appraisers Are Threatening Real Estate's Recovery
- Best Back-to-School Retail Picks: Analyst
- Boxers or Briefs-For Your Hands?
- Verizon: A 'Tough Business' to Be in Right Now
- Options Action: Mining Exchange Traded Fund
- Making the Case For and Against Healthcare Reform
- Dow 9,000 - Not So Meaningful
- Malaysia airline offers region pass to spur travel
- Singapore bets recession won't dim love for malls
- Frank wants tougher rules for Wall Street pay
- SPIN METER: 'Help Wanted' counting stimulus jobs
- Canon profits plunge 86 percent in 2Q
- Deutsche Bank Q2 net profit up 67 percent to euro1.1B
- Hitachi slides to $868 million loss in April-June
- Ahold sales rise 11.5 percent in Q2
- Ariz.-based company to build bridge parts in Libby
Text Size 
NEW YORK - Managed care provider UnitedHealth Group Inc. said Monday it will pay about $510 million to buy rival Health Net Inc.'s operations in the northeastern U.S., which include 578,000 members in Connecticut, New York and New Jersey and are expected to generate 2009 revenue of about $2.7 billion.
The transaction is expected to close within a year and will add modestly to both companies' profits. After closing, UnitedHealth said it will transfer $290 million to Health Net. The remaining portion of the operations' value — currently estimated at $160 million — will be distributed over the next two years as Health Net members shift to UnitedHealthcare plans.
UnitedHealth, the largest commercial health insurer as measured by revenue, said it also will pay Health Net $60 million for its Medicare and Medicaid businesses and commercial membership renewal rights. The Minnetonka, Minn.-based company will pay additional funds on a per member basis as Health Net's customers transition to UnitedHealthcare, potentially totaling as much as $120 million.
Health Net President and CEO Jay Gellert said the deal allows the company to focus on its health plans in the West. Los Angeles-based Health Net also now plans to retain its Arizona health plan.
"We determined that there are greater synergistic opportunities among our three Western health plans than we originally thought," said Gellert. "Also, Arizonas performance is improving significantly. The commercial market has become much more rational, our provider network is stable, and Medicare is achieving anticipated improvements."
Health Net currently provides health benefits to approximately 6.6 million people through group, individual, Medicare, Medicaid and TRICARE and Veterans Affairs programs.
Shares of UnitedHealth closed earlier down 25 cents at $24.84. Health Net rose 29 cents, or 2.2 percent, to $13.50 in aftermarket trading, having closed the regular session down 26 cents at $13.21.
Print
Email
Data is a real-time snapshot *Data is delayed at least 15 minutes