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Value Health in stock swap
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January 16, 1997: 10:14 a.m. ET
$1.3 billion merger with Columbia/HCA to finish by mid-1997
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NEW YORK (CNNfn) -- Columbia/HCA Healthcare Corp. and Value Health Inc. said late Wednesday that they sealed a definitive agreement to join in a $1.3 billion stock-for-stock merger.
The proposed tax-free merger is expected to be accounted for as a pooling of interests, the companies said in a statement.
The deal requires approval by shareholders and federal regulators. The companies expect to complete the merger by mid-1997.
Each Value Health shareholder will receive .58 shares of Columbia common stock in exchange for each Value Health share they own.
"Value Health fits well into Columbia's integrated delivery system and increases our ability to be a full-service provider of healthcare services," said Richard L. Scott, chairman and chief executive officer of Columbia.
Following the merger, Value Health's ValueRx subsidiary and Columbia Health Solutions will combine, bringing total members to more than 28 million and adding more than 2,500 commercial and wholesale customers.
ValueRx manages $2.2 billion of pharmaceutical purchases through its retail and mail-order pharmacy businesses, bringing in 80 percent of Value Health's revenues. Columbia buys $500 million of pharmaceuticals each year.
In addition, Community Care Network/Medview will combine with Columbia's OneSource Health Network, a group health and workers' compensation network.
Through the merger, Columbia expects to issue 35 million shares of its common stock to Value Health holders, bringing Columbia's total outstanding shares to 716 million.
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