WellPoint to buy Wisconsin Blues plan
Cobalt had planned to stay independent, until the California company's offer came along.
By Robert Kazel, amednews staff. June 23, 2003.
Cobalt Corp., parent of the Blue Cross and Blue Shield plan in Wisconsin, unexpectedly got an offer it couldn't refuse this month: It accepted a bid to be acquired by California-based WellPoint Health Networks, even though Cobalt had taken itself off the market last year.
The planned merger between Milwaukee-based Cobalt Corp. and WellPoint would add about 800,000 Wisconsin patients to WellPoint's existing membership of 13.5 million and add significantly to its presence in the Midwest.
WellPoint is set to pay Cobalt $906 million in cash and stock. The union of the two companies, which requires the approval of regulators, was announced June 3 and is expected to be accomplished by the end of this year.
"WellPoint will allow us to achieve everything we set out to do ourselves and do it faster," said Michael Bernstein, president and chief operating officer of Cobalt, which is the holding company for Blue Cross & Blue Shield United of Wisconsin.
The Blues plan in 2001 transformed into a for-profit, publicly traded corporation in the hope of attracting investments and becoming more appealing to potential acquisition partners.
Last year, however, as Cobalt's once-struggling financial picture improved markedly and new turnaround strategies were implemented, the company decided to take itself off the acquisition block. Cobalt executives were surprised when WellPoint contacted the company about three months ago with an offer to buy it, Bernstein said.
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