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Aetna To Buy Coventry In $5.7 Billion Deal

5:45 AM, Aug 20, 2012   |    comments
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(AP) -- Aetna is buying Coventry Health Care for $5.7 billion as the insurance industry realigns itself to better navigate the massive government health care overhaul.

The Hartford, Conn., company will pay a total of $42.08 for each share of Coventry stock. That includes $27.30 in cash and a portion of its stock. The price represents a 20 percent premium on Coventry's Friday closing price of $34.94.

The deal is valued at $7.3 billion, including Coventry's debt.

Aetna Inc. said Monday that the deal will help its Medicare Advantage businesses, and it will grow the insurer's Medicaid business. Medicaid is the state-federal program that provides coverage for the needy and disabled that is targeted for expansion under the health care overhaul.

Coventry Health Care Inc. is based in Bethesda, Md.