--WellPoint's planned $4.46 billion deal gets antitrust approval
following Amerigroup agreement to sell Virginia business
--WellPoint now needs approval from regulators in Washington to
close deal
--Close could come by year end
(Adds details on final approval needed in Washington )
By Jon Kamp
WellPoint Inc. (WLP) on Wednesday gained antitrust clearance
from the U.S. Department of Justice for its planned $4.46 billion
purchase of Medicaid insurer Amerigroup Corp. (AGP), which could
close in coming weeks pending approval from regulators in the state
of Washington.
The DOJ said Amerigroup's agreement to divest its Virginia
operations ensures continued competition in the markets for
Medicaid managed-care plans in northern Virginia, and addresses the
department's concerns about the deal. Amerigroup in September
agreed to sell its Virginia business to not-for-profit health
provider Inova, and the DOJ said Wednesday it has closed its
investigation into that sale.
The transaction between Amerigroup and WellPoint, as originally
proposed, would have substantially lessened competition for
Medicaid managed-care plans in northern Virginia because WellPoint
and Amerigroup are the only two providers there, the DOJ said.
WellPoint, the second-largest managed-care firm by membership
after UnitedHealth Group Inc. (UNH), is buying Amerigroup as the
insurance sector increasingly looks for exposure to growing
government-based health programs like Medicaid, which covers the
poor. The deal for fast-growing Amerigroup will make WellPoint the
biggest Medicaid insurer and may help it compete for Medicaid
patients who also qualify for Medicare.
The companies are close to closing their deal, which they've
said should happen by year end. Amerigroup noted in a regulatory
filing this week that Washington is the only state, out of about a
dozen where Amerigroup has members, yet to approve the transaction.
The deal is expected to close "as soon as practicable" after the
Washington State Office of the Insurance Commissioner holds a
hearing to consider the matter, Amerigroup said.
Amerigroup shares rose nine cents to close at $91.77, near the
$92-per-share purchase price. WellPoint shares slipped 20 cents to
$54.77.
--Nathalie Tadena contributed to this article.
-Write to Jon Kamp at jon.kamp@dowjones.com
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