UnitedHealth Group Inc. (NYSE:UNH) agreed to acquire Catamaran Corp (USA) (NASDAQ:CTRX) in a deal worth approximately $12.8 billion. The deal will help United in enhancing its drug-benefit business so as to get in a better position while dealing with the pharmaceutical companies in future.
The transaction details
United will make a payment of $61.50 per share to Catamaran. The acquisition shall be financed with debt as well as cash. This is the largest deal of United ever, for which it is paying approximately 27% higher than the closing price of Catamaran on March 27, 2015.
Deal to put pressure on drugmakers
It is expected that the deal would pressurize the drugmakers more, while also creating a vital impact on the prices. The industry of pharmacy benefits has remained the central point of discussion between the customers and drug-makers because of the costs of new therapies and treatments.
An interesting angle of the deal: Cigna
It is quite interesting that Catamaran gets approximately 1/3rd of the revenue from UnitedHealth’s biggest rival, CIGNA Corporation (NYSE:CI). The deal of Catamaran with United will pose risks of Cigna putting a halt to the relations with this company, in order to avoid helping its own rival.
However, in this context, the spokesman of UnitedHealth, Tyler Mason said that they are expecting a significant value from the combo of Optum Rx and Catamaran to Cigna. Meanwhile, they added that the relationship between Cigna and Catamaran will be respected and benefits of deal shall be discussed with everyone, including the present business partners of Catamaran.
In 2013, Cigna had agreed to a 10-year commitment to Catamaran. The spokesman of Cigna says that the company has not wavered from its agreement with Catamaran since 2013 and that their objective is to maintain strong relation. Matthew Asensio, the spokesman added that Cigna is not expecting any crucial impact on operations or services with this deal.