UPDATE: June 25, 2019: Missouri's state insurance regulator approved the Centene-WellCare deal with the condition that the WellCare unit, which does business as Missouri Care in the state, is sold.
- Shareholders overwhelmingly approved Centene's $17 billion acquisition of rival WellCare on Monday, the companies said.
- At separate meetings, 99% of the voting stockholders for both companies voted in favor of the deal. Those who voted represented 85% of the Centene's outstanding shares, while WellCare voters represented 83% of outstanding shareholders.
- The news is unsurprising given the leading proxy firm recommended shareholders support the deal and with Humana's statement that it would not bid on Centene, analysts with SVB Leerink said in a recent note.
This isn't the final hurdle for the deal, which now awaits various regulatory approvals.
The acquisition needs an OK from 26 states and has already received conditional approval in four: Alabama, Arkansas, Kentucky and Missouri, Centene said in a statement Monday.
However, as expected, the deal will require divestitures of "certain Medicaid assets" in the state of Missouri, the company said.
CEO Michael Neidorff previously said that divestitures were likely in Missouri and Nebraska. Missouri's state insurance regulator approved the Centene-WellCare deal with the condition that the WellCare unit, which does business as Missouri Care in the state, is sold, according to the approval document.
"We have already seen a great deal of interest from potential acquirers," Neidorff said earlier this month during the company's investor day, according to a transcript in an SEC filing.
Given the amount of overlap between the two competitors, experts said the deal would likely bring antitrust scrutiny.
The Department of Justice did request additional details and documents from each company. Yet, that is not surprising given the size of the deal, the company said.
Centene's bet on WellCare will more than double its footprint in Medicare and expand its core Medicaid presence.
"Going into the next decade, we expect our Medicare line of business to be a key driver of our annual growth," Neidorff said during the investor day.
Combined, the company would cover 22 million lives across all 50 states and generate nearly $100 billion in revenue.