EmailWellPoint (WLP $62.27 +2.35) and Amerigroup (AGP $88.70 +24.21) announced that they have entered into a definitive agreement through which WellPoint will acquire Amerigroup. Under the terms of the agreement, WellPoint will pay $92.00 per share in cash to acquire all of the outstanding shares of Amerigroup for a transaction value of approximately $4.9 billion. Upon completion, WellPoint, with its affiliated Medicaid plans, will serve more than four-and-a-half million beneficiaries of state sponsored health care programs. The combined company's Medicaid footprint will include 19 states.
The company will also have a presence in 13 states with significant near-term dual eligible managed care opportunities, including a presence in the four largest states that have a combined $105 billion in annual dual eligible spending. The transaction is expected to be accretive to WellPoint's earnings per share in 2013, including one-time transaction and integration costs. Accretion is expected to increase in 2014 and exceed $1.00 per share by 2015, inclusive of the build out costs associated with the expanding dual eligible and reform-driven Medicaid opportunities. WellPoint is not changing its 2012 EPS guidance for this transaction.
