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Market Update

Aetna to Acquire Humana for $37 B

Author: Mukesh Buch
Last Update: 12:05 PM ET July 06 2015

12:05 PM New York Aetna agreed to acquire Humana for $37 billion as consolidation in health insurance market accelerates. Allergan agreed to acquire Oculeve for $125 million. Philip Morris may sell stake of $1 billion in Indonesia-based unit. Whirlpool completed acquisition of American Dryer.

Tollbooth Index fell 16.95 to 10,664.34.

Earnings Review

Allergan, Inc fell 31 cents to $307.20 after the Ireland-based pharmaceutical company agreed to acquire medical devices maker Oculeve for $125 million in an all-cash transaction.

The transaction is expected to close in the third quarter.

Aetna Inc (AET) declined 4.5% or $5.62 to $119.87 after the diversified health care company agreed to acquire Humana Inc for cash and stock valued at about $37 billion or approx $230 per Humana share based on the closing price of Aetna common shares on July 2.

Humana stockholders will receive $125 in cash and 0.8375 per shares of Aetna.

The combined company projected operating revenue of fiscal 2015 of about $115 billion.

The transaction is expected to close in the second-half of 2016.

Humana Inc (HUM) jumped 3.2% or $6.04 to $193.51 after the insurance company forecasted earnings per share for the second-quarter between $1.60 and $1.65 and for the year about $7.75.

Linn Energy LLC rose 1 cent to $9.17 after the oil and natural gas explorer agreed to sell its remaining stake in Howard County in the Permian Basin for a contract price of $281 million.

Separately the company signed an agreement with private capital investor Quantum Energy Partners to fund selected future oil and natural gas acquisitions and the development of acquired assets as it agreed to fund up to $1 billion.

In separate news, the company also signed an agreement with private capital GSO Capital Partners LP to fund oil and natural gas development for about $500 million over the next five years.

Philip Morris International Inc (PM) rose 15 cents to $81.30 after the Wall Street Journal reported tobacco products maker plans to sell a stake worth about $1 billion in Indonesia-based subsidiary PT HM Sampoerna Tbk.

Whirlpool Corporation (WHR) gained 35 cents to $170.08 after the home appliances maker completed its purchase of a privately held industrial and laundry equipment maker American Dryer Corporation.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc