June 24, 2019 | Health Care | North America | Ended

WellCare Health Plans / Centene Corporation: Antitrust Assessment and Other Deal Considerations

Centene’s ambitions to acquire WellCare in a $17.3bn cash and stock transaction has been approved by both boards and sets of shareholders, so the sole focus is on regulatory clearances at US federal and state insurance levels. Centene’s motivation for the deal is centred on building scale to compete with its larger competitors in managed care and on establishing a bigger Medicare Advantage footprint. Primarily due to Medicaid Managed Care Organisation (MCO) overlap within counties and states, the deal will inevitably catch the eye of US antitrust regulators. As well, risks posed by the Trump administration’s threats to repeal the Patient Protection and Affordable Care Act (ACA) could have considerable implications for US health insurance markets, and on Centene and WellCare’s standalone businesses.

Contents 1. US Healthcare Delivery Industry Primer 2. Strategic Rationale 3. Antitrust Risk: Defining Markets, Commentary, Overlaps 4. Affordable Care Act Risk: Implications of a Repeal 5. Acquirer Activism and Bid Risk: Assessing Suitors Beyond Humana 6. Break Price Analysis and Risk Arbitrage Trading Thoughts (44 pages)

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