Combination will create the premier health services company
with critical diversification to lead the transformation of health
care for consumers by enhancing health care access, quality and
affordability
Cigna shareholders receiving consideration of $103.40 per share
in cash and 0.5152 shares of Anthem stock in exchange for each
Cigna share, reflecting a value of $188.00 based on Anthem's
unaffected share price as of May 28, 2015
Combination expected to drive adjusted earnings per share
accretion approaching 10% in year one, with accretion more than
doubling in year two
The combined company will cover approximately 53 million
medical members with well positioned commercial, government,
consumer, specialty businesses along with a market-leading leading
international franchise
Indianapolis, Ind. and Bloomfield, Conn. - July 24, 2015 -
Anthem, Inc. (NYSE: ANTM) and Cigna Corporation (NYSE: CI) today
announced that they have entered into a definitive agreement
whereby Anthem will acquire all outstanding shares of Cigna in a
cash and stock transaction and Cigna shareholders will receive
$103.40 in cash and 0.5152 Anthem common shares for each Cigna
common share. The total per share consideration equates to
approximately $188.00 for each Cigna share based on Anthem's
closing share price on May 28, 2015, valuing the transaction at
$54.2 billion on an enterprise basis.
The combined company will be an industry leader with enhanced
diversification and capabilities to advance the transformation of
health care delivery for consumers. Following the transaction,
Anthem will have more than $115 billion in pro forma annual
revenues, based on the most recent 2015 outlooks publicly reported
by both companies and will gain meaningful diversification covering
approximately 53 million medical members with well positioned
commercial, government, consumer, specialty and international
franchises. Upon the close of the transaction, Joseph Swedish will
serve as Chairman and Chief Executive Officer of the combined
company and David Cordani will be President and Chief Operating
Officer. In addition, effective upon closing, the Anthem Board of
Directors will be expanded to 14 members. David Cordani and four
independent directors from Cigna's current Board of Directors will
join the nine current members of the Anthem Board of Directors.
The agreement provides an "unaffected" premium to Cigna's
shareholders of approximately 38.4%, based on the unaffected
closing price of Cigna's shares on May 28, 2015. Under the terms of
the transaction, the consideration consists of approximately 55%
cash and 45% Anthem shares, and thecombined company would reflect a
pro forma equity ownership comprised of approximately 67% Anthem
shareholders and approximately 33% Cigna shareholders.
"We are very pleased to announce an agreement that will deliver
meaningful value to consumers and shareholders through expanded
provider collaboration, enhanced affordability and cost of care
management capabilities, and superior innovations that deliver a
high quality health care experience for consumers. We believe that
this transaction will allow us to enhance our competitive position
and be better positioned to apply the insights and access of a
broad network and dedicated local presence to the health care
challenges of the increasingly diverse markets, membership, and
communities we serve. The Cigna team has built a set of
capabilities that greatly complement our own offerings and the
combined company will have a competitive presence across
commercial, government, international and specialty segments. These
expanded capabilities will enable us to better serve our customers
as their health care needs evolve," said Joseph Swedish, President
and Chief Executive Officer of Anthem.
"Our companies share proud histories and an even brighter
future. Going forward our new company will deliver an acceleration
of innovative and affordable health and protection benefits
solutions that help address our health system's challenges and
provide supplemental insurance protection, and health care security
to consumers, their families, and the communities we share with
them. The complementary nature of our businesses will allow us to
leverage the deep global health care knowledge, local market
talent, and expertise of both organizations to ensure that
consumers have access to affordable and personalized solutions
across diverse life and health stages and position us for sustained
success," said David M. Cordani, President and Chief Executive
Officer of Cigna.
Utilizing Anthem's and Cigna's complementary strengths, the
combined company will be able to deliver higher quality health care
as America's valued health partner. By combining Anthem's Blue
Cross and Blue Shield footprint in 14 states and Medicaid footprint
via its Amerigroup brand in 19 states with Cigna's broad portfolio
of health and protection services in the U.S. and globally, the
combined company will offer a comprehensive range of high quality,
high value products and services to the full spectrum of customers
- individuals, employers and State and Federal governments.
The transaction is expected to close in the second half of 2016,
pending the receipt of customary approvals, including certain state
regulatory approvals and expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act. In addition, the
transaction is subject to customary closing conditions, including
the approval of Cigna's shareholders of the merger agreement and
Anthem's shareholders of the issuance of shares in the transaction.
Anthem is confident in its ability to obtain all necessary
regulatory and other approvals.
The combined company expects to achieve adjusted earnings per
share accretion approaching 10% in year one, with the accretion
more than doubling by year two following the closing of the
transaction. We are confident in our ability to achieve synergy
targets and are committed to retaining investment grade debt
ratings. Anthem expects its debt-to-capital ratio to be
approximately 49% at the time of close, with a plan to bring the
ratio down to the low 40% range within 24 months. Anthem has
received committed financing from Bank of America, Credit Suisse
and UBS Investment Bank in connection with the transaction.
Anthem and Cigna management will host a conference call to
discuss the transaction at 8:30 AM EDT today, July 24, 2015.
Additional materials regarding the transaction are available on our
website at www.betterhealthcaretogether.com/.
Anthem's lead financial advisor is UBS Investment Bank and
Credit Suisse also served as financial advisor and its legal
advisor is White & Case LLP. Morgan Stanley is acting as
Cigna's financial advisor, and Cravath, Swaine & Moore LLP is
acting as legal advisor to Cigna.
Conference Call
Anthem and Cigna will hold a conference call and webcast at
8:30 a.m. Eastern Daylight Time ("EDT") today, July 24, 2015, to
discuss the transaction. The conference call should be accessed at
least 15 minutes prior to its start with the following numbers. An
investor presentation is available for download at
www.antheminc.comor
www.cigna.com/aboutcigna/investorsunder the
"Investors" link..
877-871-3172 (Domestic)
877-344-7529 (Domestic Replay)
412-902-6603 (International)
412-317-0088 (International Replay)
The access code for the July 24, 2015, conference call is
4135855. The access code for the replay is 10069758. The replay
will be available from 1:00 p.m. EDT on July 24, 2015, until the
end of the day on August 7, 2015. A webcast replay will be
available following the call.
Anthem Contacts:
Investor Relations
Doug Simpson, 317-488-6181
Douglas.simpson@anthem.com
Media
Kristin Binns, 917-697-7802
Kristin.binns@anthem.com
Cigna Contacts:
Investor Relations
Will McDowell, 215-761-4198
William.mcdowell2@cigna.com
Media
Matt Asensio, 860-226-2599
Matthew.asensio@cigna.com
About Anthem, Inc.
Anthem is working to transform health care with trusted and
caring solutions. Our health plan companies deliver quality
products and services that give their members access to the care
they need. With nearly 71 million people served by its affiliated
companies, including more than 38 million enrolled in its family of
health plans, Anthem is one of the nation's leading health benefits
companies. For more information about Anthem's family of companies,
please visit www.antheminc.com/companies.
About Cigna
Cigna Corporation (NYSE: CI) is a global health service
company dedicated to helping people improve their health,
well-being and sense of security. All products and services are
provided exclusively by or through operating subsidiaries of Cigna
Corporation, including Connecticut General Life Insurance Company,
Cigna Health and Life Insurance Company, Life Insurance Company of
North America and Cigna Life Insurance Company of New York. Such
products and services include an integrated suite of health
services, such as medical, dental, behavioral health, pharmacy,
vision, supplemental benefits, and other related products including
group life, accident and disability insurance. Cigna maintains
sales capability in 30 countries and jurisdictions, and has more
than 88 million customer relationships throughout the world. To
learn more about Cigna®, including links to follow us on Facebook
or Twitter, visit www.cigna.com.
Important Information for Investors and Shareholders
This communication does not constitute an offer to sell or a
solicitation of an offer to sell or a solicitation of an offer to
buy any securities or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering ofsecurities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended, and otherwise in accordance
with applicable law.
The proposed transaction between Anthem, Inc. ("Anthem") and
Cigna Corporation ("Cigna") will be submitted to Anthem's and
Cigna's shareholders and stockholders (as applicable) for their
consideration. In connection with the transaction, Anthem and Cigna
will file relevant materials with the U.S. Securities and Exchange
Commission (the "SEC"), including an Anthem registration statement
on Form S-4 that will include a joint proxy statement of Anthem and
Cigna that also constitutes a prospectus of Anthem, and each will
mail the definitive joint proxy statement/prospectus to its
shareholders and stockholders, respectively. This communication is
not a substitute for the registration statement, joint proxy
statement/prospectus or any other document that Anthem and/or Cigna
may file with the SEC in connection with the proposed
transaction.
INVESTORS AND SECURITY HOLDERS OF ANTHEM AND CIGNA ARE URGED TO
READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED
WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. Investors and security holders will be able to obtain
free copies of the registration statement containing the joint
proxy statement/prospectus and other documents filed with the SEC
by Anthem or Cigna (when available) through the web site maintained
by the SEC at http://www.sec.gov. Copies of the documents filed
with the SEC by Anthem will be available free of charge on Anthem's
internet website at
http://www.antheminc.comor by contacting Anthem's Investor
Relations Department at (317) 488-6168. Copies of the documents
filed with the SEC by Cigna will be available free of charge on
Cigna's internet website at
http://www.cigna.comor by contacting Cigna's Investor Relations
Department at (215) 761-4198.
Anthem, Cigna and their respective directors and executive
officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies in respect
of the proposed transaction. You can find information about
Anthem's executive officers and directors in Anthem's annual report
on Form 10-K for the year ended December 31, 2014 and its
definitive proxy statement filed with the SEC on April 1, 2015. You
can find information about Cigna's executive officers and directors
in Cigna's annual report on Form 10-K for the year ended December
31, 2014 and its definitive proxy statement filed with the SEC on
March 13, 2015. Additional information regarding the interests of
such potential participants will be included in the joint proxy
statement/prospectus when it is filed with the SEC. You may obtain
free copies of these documents using the sources indicated
above.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This document, and oral statements made with respect to
information contained in this communication, contain certain
forward-looking information about Anthem, Inc. ("Anthem"), Cigna
Corporation ("Cigna") and the combined businesses of Anthem and
Cigna that is intended to be covered by the safe harbor for
"forward-looking statements" provided by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are
statements that are not generally historical facts. Words such as
"expect(s)," "feel(s)," "believe(s)," "will," "may,"
"anticipate(s)," "intend," "estimate," "project" and similar
expressions (including the negative thereof) are intended to
identify forward-looking statements, which generally are not
historical in nature. These statements include, but are not limited
to, statements regarding the merger between Anthem and Cigna;
Anthem's financing of the proposed transaction; the combined
company's expected future performance (including expected results
of operations and financial guidance); the combined company's
future financial condition, operating results, strategy and plans;
statements about regulatory and other approvals; synergies from the
proposed transaction; the combined company's expected
debt-to-capital ratio and ability to retain investment grade
ratings; the closing date for the proposed transaction; financial
projections and estimates and their underlying assumptions;
statements regarding plans, objectives and expectations with
respect to future operations, products and services; and statements
regarding future performance. Such statements are subject to
certain known and unknown risks and uncertainties, many of which
are difficult to predict and generally beyond Anthem's and Cigna's
control, that could cause actual results and other future events to
differ materially from those expressed in, or implied or projected
by, the forward-looking information and statements. These risks and
uncertainties include: those discussed and identified in Anthem's
and Cigna's public filings with the U.S. Securities and Exchange
Commission (the "SEC"); those relating to the proposed transaction,
as detailed from time to time in Anthem's and Cigna's filings with
the SEC; increased government participation in, or regulation or
taxation of health benefits and managed care operations, including,
but not limited to, the impact of the Patient Protection and
Affordable Care Act and the Health Care and Education
Reconciliation Act of 2010, or Health Care Reform; trends in health
care costs and utilization rates; our ability to secure sufficient
premium rates including regulatory approval for and implementation
of such rates; our participation in the federal and state health
insurance exchanges under Health Care Reform, which have
experienced and continue to experience challenges due to
implementation of initial and phased-in provisions of Health Care
Reform, and which entail uncertainties associated with the mix and
volume of business, particularly in Individual and Small Group
markets, that could negatively impact the adequacy of our premium
rates and which may not be sufficiently offset by the risk
apportionment provisions of Health Care Reform; our ability to
contract with providers consistent with past practice; competitor
pricing below market trends of increasing costs; reduced
enrollment, as well as a negative change in our health care product
mix; risks and uncertainties regarding Medicare and Medicaid
programs, including those related to non-compliance with the
complex regulations imposed thereon and funding risks with respect
to revenue received from participation therein; our projected
consolidated revenue growth and global medical customer growth; a
downgrade in our financial strength ratings; litigation and
investigations targeted at our industry and our ability to resolve
litigation and investigations within estimates; medical malpractice
or professional liability claims or other risks related to health
care services provided by our subsidiaries; our ability to
repurchase shares of its common stock and pay dividends on its
common stock due to the adequacy of its cash flow and earnings and
other considerations; non- compliance by any party with the Express
Scripts, Inc. pharmacy benefit management services agreement, which
could result in financial penalties; our inability to meet customer
demands, and sanctions imposed by governmental entities, including
the Centers for Medicare and Medicaid Services; events that result
in negative publicity for us or the health benefits industry;
failure to effectively maintain and modernize our information
systems and e-business organization and to maintain good
relationships with third party vendors for information system
resources; events that may negatively affect Anthem's licenses with
the Blue Cross and Blue Shield Association; possible impairment of
the value of our intangible assets if future results do not
adequately support goodwill and other intangible assets; intense
competition to attract and retain employees; unauthorized
disclosure of member or employee sensitive or confidential
information, including the impact and outcome of investigations,
inquiries, claims and litigation related to the cyber attack Anthem
reported in February 2015; changes in the economic and market
conditions, as well as regulations that may negatively affect our
investment portfolios and liquidity; possible restrictions in the
payment of dividends by our subsidiaries and increases in required
minimum levels of capital and the potential negative effect from
our substantial amount of outstanding indebtedness; general risks
associated with mergers and acquisitions; various laws and
provisions in Anthem's governing documents that may prevent or
discourage takeovers and business combinations; future public
health epidemics and catastrophes; and general economic downturns.
Important factors that could cause actual results and other future
events to differ materially from the forward-looking statements
made in this communication are set forth in other reports or
documents that Anthem and/or Cigna may file from time to time with
the SEC, and include, but are not limited to: (i) the ultimate
outcome of the proposed transaction, including the ability to
achieve the synergies and value creation contemplated by the
proposed transaction, (ii) the ultimate outcome and results of
integrating the operations of Anthem and Cigna, (iii) disruption
from the merger making it more difficult to maintain businesses and
operational relationships, (iv) the risk that unexpected costs will
be incurred in connection with the proposed transaction, (v) the
timing to consummate the proposed transaction, (vi) the possibility
that the proposed transaction does not close, including, but not
limited to, due to the failure to satisfy the closing conditions,
including the receipt of required regulatory approvals and the
receipt of approval of both Anthem's and Cigna's shareholders and
stockholders, respectively, and (viii) the risks and uncertainties
detailed by Cigna with respect to its business as described in its
reports and documents filed with the SEC. All forward-looking
statements attributable to Anthem, Cigna or any person acting on
behalf of Anthem and/or Cigna are expressly qualified in their
entirety by this cautionary statement. Readers are cautioned not to
place undue reliance on these forward- looking statements that
speak only as of the date hereof. Except to the extent otherwise
required by federal securities law, neither Anthem nor Cigna
undertake any obligation to republish revised forward-looking
statements to reflect events or circumstances after the date hereof
or to reflect the occurrence of unanticipated events or the receipt
of new information. Readers are also urged to carefully review and
consider the various disclosures in Anthem's and Cigna's SEC
reports.
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