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Centene to buy Fidelis Care for $3.75 billion to enter New York

Michael Neidorff, CEO of  Centene Corporation.
Cameron Costa | CNBC
Michael Neidorff, CEO of Centene Corporation.

Health insurer Centene said it would buy privately held Fidelis Care for $3.75 billion to enter New York, the second largest managed care state by membership in the United States.

The company's stock rose 6.7 percent to $97 in aftermarket trading on Tuesday.

The acquisition would help Centene expand its government sponsored health-care coverage with a leadership position in New York, the company said.

Fidelis Care, a not-for-profit corporation, offers affordable health insurance coverage to New York residents and has over 1.6 million members in the state as of June 30.

Centene said the deal, which is expected to close in the first quarter of 2018, would significantly improve the company's earnings per share.

Allen & Company was the financial adviser to Centene and Skadden its legal counsel. Citi was the financial adviser to Fidelis Care and Norton Rose Fulbright its legal counsel.