UnitedHealth Group Completes Acquisition of Sierra Health Services
February 25 2008 - 7:54PM
Business Wire
UnitedHealth Group (NYSE: UNH) and Sierra Health Services, Inc.
(NYSE: SIE) today announced that they completed their transaction
effective as of the close of business today. Under the merger
agreement, Sierra stockholders receive $43.50 in cash for each
share of Sierra common stock, representing an equity value of
approximately $2.6 billion. The U.S. Department of Justice has
provided approval of the acquisition. As a condition of approval,
UnitedHealth Group will divest its individual SecureHorizons
Medicare Advantage HMO plans in Clark and Nye Counties, which
represent approximately 25,000 members. UnitedHealth Group has
reached an agreement to transition these members to Humana Inc.,
subject to customary closing conditions. UnitedHealth Group and
Humana have agreed to work together to ensure a seamless transition
of the individual SecureHorizons Medicare Advantage HMO plans in
Clark and Nye Counties and will notify affected members as details
become available. UnitedHealth Group emphasized that
post-divestiture, these members will continue to receive the
benefits they currently have, and there will be no interruption in
these members� health care coverage. Group SecureHorizons Medicare
Advantage plans offered to retirees through commercial customers or
contracts are currently excluded from the divestiture and will
continue to be operated by UnitedHealth Group. Sierra will retain
its Medicare Advantage HMO plans in Nevada which are offered under
the Senior Dimensions brand. Ken Burdick, CEO of UnitedHealthcare,
said, �We look forward to building on our shared heritage of
providing consumers access to affordable, high-quality health care.
Our goal is to offer Nevadans the most comprehensive range of
cost-effective, innovative health care products and services in the
Southwest.� Jonathon Bunker, president and COO of Sierra, said,
�Joining our two organizations will be good for Nevada�s health
care consumers, good for the many dedicated professionals who
provide their care and good for the employees of Sierra. With
greater resources and advanced technology, we can now build upon
our legacy by providing more options for our members and expanded
access to the largest national network of hospitals, physicians and
other care providers.� In connection with the transaction,
UnitedHealth Group and Sierra also reached an agreement with Nevada
Attorney General Catherine Cortez Masto that is consistent with the
terms of the Department of Justice consent decree. As part of that
agreement, and consistent with UnitedHealth Group�s longstanding
commitment of philanthropic initiatives to improve and expand
health care access for underserved populations, UnitedHealth Group
will make $15 million in charitable contributions over the next
five years to benefit health care consumers and programs in the
State of Nevada. Today�s news does not impact UnitedHealth Group�s
full year 2008 financial outlook, which previously included
projected results for Sierra. UnitedHealth Group continues to
project full year revenue of approximately $83 billion and earnings
in the range of $3.95 - $4.00 per share. About UnitedHealth Group
UnitedHealth Group is a diversified health and well-being company
dedicated to making health care work better. Headquartered in
Minneapolis, Minn., UnitedHealth Group offers a broad spectrum of
products and services through seven operating businesses:
UnitedHealthcare, Ovations, AmeriChoice, Uniprise, OptumHealth,
Ingenix, and Prescription Solutions. Through its family of
businesses, UnitedHealth Group serves approximately 70 million
individuals nationwide. About Sierra Health Services, Inc. Sierra
Health Services, Inc., based in Las Vegas, is a diversified
healthcare services company that operates health maintenance
organizations, indemnity insurers, preferred provider
organizations, prescription drug plans and a multi-specialty
medical group. Sierra�s subsidiaries serve over 860,000 people
through health benefit plans for employers, government programs and
individuals. For more information, visit Sierra�s website at
www.sierrahealth.com. Forward-Looking Statements This press release
may contain statements, estimates, projections, guidance or outlook
that constitute �forward-looking� statements as defined under U.S.
federal securities laws. Generally the words �believe,� �expect,�
�intend,� �estimate,� �anticipate,� �plan,� �project,� �will� and
similar expressions, identify forward-looking statements, which
generally are not historical in nature. These statements may
contain information about financial prospects, economic conditions,
trends and uncertainties. We caution that actual results could
differ materially from those that management expects, depending on
the outcome of certain factors. These forward-looking statements
involve risks and uncertainties that may cause UnitedHealth Group�s
actual results to differ materially from the results discussed in
the forward-looking statements. Some factors that could cause
results to differ materially from the forward-looking statements
include: the potential consequences of the findings announced on
October 15, 2006 of the investigation by an Independent Committee
of directors of our historical stock option practices; the
consequences of the restatement of our previous financial
statements, related governmental reviews, including a formal
investigation by the Securities and Exchange Commission, and review
by the Internal Revenue Service, U.S. Congressional committees,
U.S. Attorney for the Southern District of New York and Minnesota
Attorney General, a related review by the Special Litigation
Committee of the Company, and related shareholder derivative
actions, including whether court approval of the settlement
agreements between the Company and certain named defendants and the
dismissal of the derivative claims against all named defendants is
obtained, shareholder demands and purported securities and Employee
Retirement Income Security Act class actions, the resolution of
matters currently subject to an injunction issued by the United
States District Court for the District of Minnesota, a purported
notice of acceleration with respect to certain of the Company�s
debt securities based upon an alleged event of default under the
indenture governing such securities, and recent management and
director changes, and the potential impact of each of these matters
on our business, credit ratings and debt; increases in health care
costs that are higher than we anticipated in establishing our
premium rates, including increased consumption of or costs of
medical services; heightened competition as a result of new
entrants into our market, and consolidation of health care
companies and suppliers; events that may negatively affect our
contract with AARP; uncertainties regarding changes in Medicare,
including coordination of information systems and accuracy of
certain assumptions; funding risks with respect to revenues
received from Medicare and Medicaid programs; failure to achieve
business growth targets, including membership and enrollment;
increases in costs and other liabilities associated with increased
litigation, legislative activity and government regulation and
review of our industry; our ability to execute contracts on
competitive terms with physicians, hospitals and other service
providers; regulatory and other risks associated with the pharmacy
benefits management industry; failure to maintain effective and
efficient information systems, which could result in the loss of
existing customers, difficulties in attracting new customers,
difficulties in determining medical costs estimates and appropriate
pricing, customer and physician and health care provider disputes,
regulatory violations, increases in operating costs, or other
adverse consequences; possible impairment of the value of our
intangible assets if future results do not adequately support
goodwill and intangible assets recorded for businesses that we
acquire; potential noncompliance by our business associates with
patient privacy data; misappropriation of our proprietary
technology; failure to complete or receive anticipated benefits of
acquisitions; the potential consequences of the New York Attorney
General�s investigation into our provider reimbursement practices;
and the outcome of the divestiture of our individual SecureHorizons
Medicare Advantage HMO plans in Clark and Nye Counties (Nevada) and
the integration of the operations of the Company and Sierra Health
Services, Inc. after the divestiture. This list of important
factors is not intended to be exhaustive. A further list and
description of some of these risks and uncertainties can be found
in our reports filed with the Securities and Exchange Commission
from time to time, including annual reports on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K. Any or all
forward-looking statements we make may turn out to be wrong. You
should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. Except to the extent
otherwise required by federal securities laws, we do not undertake
to publicly update or revise any forward-looking statements.
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