UnitedHealth Group Inc. (NYSE:UNH) will buy Catamaran Corp (NASDAQ:CTRX) for $61.50 a share, or $12.8 billion. The acquisition will allow UnitedHealth to have negotiating power when making deals with pharmaceutical companies.
The purchase will be financed with cash and debt, states the company. News of the acquisition has helped Catamaran’s stock rise 24% in early morning trading up to $59.83 after closing at $48.32 on Friday.
Investors are uncertain of the deal. While stock prices for both companies have went up, the biggest concern deals with Catamaran’s main revenue contributor: Cigna Corp. Cigna brings in a third of the company’s revenue but is a big competitor of UnitedHealth. Concerns that Cigna will end their relationship with Catamaran are valid.
A representative for Cigna states that the acquisition will not change the 10-year agreement the company made with Catamaran in 2013. Cigna hopes that there will be no impact in service or operations as a result of the acquisition.
UnitedHealth will combine OptumRX, the company’s drug-benefit unit, in an attempt to add to its customer base.
The acquisition will allow UnitedHealth to be able to negotiate better prices and rebates on costly drugs in an attempt to slow the growing cost of medications.