UnitedHealth to buy Sierra Health for $2.6B

No. 2 health insurer also reaffirms plan to buy back up to $4.5 billion in stock.


NEW YORK (CNNMoney.com) -- UnitedHealth Group, the No. 2 health insurer in the U.S., announced plans to buy Las Vegas-based Sierra Health Services in an all-cash deal valued at $2.6 billion.

Minneapolis-based UnitedHealth (Charts) said it hopes the move will position it for expansion in the Southwest while broadening the services it can offer in the fast-growing senior patient market.

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"The combined enterprise will have the scale, resources and commitment to offer the most comprehensive range of affordable services to our clients in the Southwest, as well as for clients with business interests across the country," said UnitedHealth president and CEO Stephen J. Hemsley in a statement.

Sierra serves about 310,000 employer-sponsored health plan members in Nevada and 320,000 people in senior and government programs throughout the U.S., UnitedHealth said.

After the merger, Sierra's founder, chairman and CEO, Anthony M. Marlon, will continue to oversee operations in Nevada, according to UnitedHealth.

UnitedHealth's 2006 revenues were $71.5 billion while Sierra's 2006 revenues were $1.7 billion.

In addition to buying Sierra (Charts), UnitedHealth also reaffirmed plans for a $4 billion-$4.5 billion share repurchase plan in 2007.

UnitedHealth serves about 70 million people through six companies: UnitedHealthcare, Ovations, AmeriChoice, Uniprise, Specialized Care Services and Ingenix.

UnitedHealth competes with Aetna Inc (Charts). and No. 1 ranked WellPoint (Charts).

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.