(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.