Change Healthcare surges 32% after news of $8 billion acquisition by UnitedHealth

FILE PHOTO: The corporate logo of the UnitedHealth Group appears on the side of one of their office buildings in Santa Ana, California, U.S., April 13, 2020.      REUTERS/Mike Blake
The corporate logo of the UnitedHealth Group appears on the side of one of their office buildings in Santa Ana, California


Shares of Change Healthcare gained as much as 32% to $24 a share on Wednesday after news that UnitedHealth Group is acquiring the health tech firm for roughly $7.8 billion.

After the acquisition, Change Healthcare will merge with UnitedHealth Group’s health services subsidiary, OptumInsight. Together the companies will connect and simplify core clinical, administrative, and payment processes for the healthcare industry, according to a UnitedHealth statement

UnitedHealth will pay $25.75 per share in cash, which is a 41% premium over Change Healthcare’s Tuesday closing price of $18.24.  Including debt owed by Change Healthcare, the deal is worth around $13 billion. The companies said the transaction is expected to close in the second half of 2021. 

Shares of UnitedHealth group fell as much as 2.8% after the Wednesday opening bell but pared back the losses. The stock is now hovering around $347 a share. As of noon on Wednesday, Change Healthcare has gained 51% over the last 12 months. 

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“Together we will help streamline and inform the vital clinical, administrative and payment processes on which health care providers and payers depend to serve patients,” said Andrew Witty, President of UnitedHealth Group and CEO of Optum.

In other healthcare merger news, Walgreens Boots Alliance agreed to sell the majority of its pharmacy wholesale unit to AmerisourceBergen Corp for about $6.5 billion. 

Shares of Walgreens Boots Alliance rose as much as 4.39%, while Amerisource Bergen gained as much as 8.7% on Wednesday. 

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