Health insurer Centene Corporation said that the takeover of WellCare Health Plans might close earlier than expected. Centene said the process of regulatory approval “is ahead of schedule,” with only federal government and two states are yet to clear the merger.
The $15.27 billion deal is projected to close in the first half of 2020. In addition, the New York State Department of Financial Services and the Department of Health approved the deal. The authorities join “24 other in issuing approvals,” Centene chairman and CEO Michael Neidorff said during third-quarter earnings call.
“The approval process continues to go well and is ahead of schedule… Given the progress of activities to date, there may be an opportunity to close earlier in 2020,” Neidorff said. Only two states remain to green-light the deal.
The U.S. government also needs to clear the transaction. The Justice Department is reviewing the merger as some medical care providers, including the American Hospital Association, have demanded a closer look at the deal, expressing concerns that it might pose a competition threat.
Centene agreed to pay over $15 billion for WellCare at the end of March. The deal will allow Centene to expand its business of administering Medicaid benefits. The combined company will be present in all 50 states. The merged entity will administer Medicaid benefits for poor Americans along with private Medicare Advantage coverage.
Currently, Centene is the largest provider of individual coverage under the Affordable Care Act. It offers subsidized Obamacare in 20 states. Shares in Centene are down 12.5% year-to-date and are currently trading at around the $49 apiece mark. In contrast, WellCare’s stock is up 22% so far this year.