Centene Corporation (NYSE:CNC) signed a definitive merger agreement to acquire WellCare Health Plans, Inc. (NYSE:WCG) for $15.6 billion on March 26, 2019. Under the terms of the merger agreement, the shareholders of WellCare Health Plans, Inc. will receive a fixed exchange ratio of 3.38 shares of Centene Corporation common stock and $120 in cash for each share of WellCare Health Plans, Inc. Each outstanding restricted stock unit (RSU) of WellCare Health Plans, Inc. that was granted in or prior to 2017 and each outstanding RSU held by a non-employee Director (regardless of when granted), whether vested or unvested, will be cancelled and converted into the right to receive the merger consideration. Additionally, each other outstanding RSU, whether vested or unvested, will be converted into a restricted stock unit relating to a number of shares of common stock of Centene Corporation equal to the number of shares of common stock of WellCare Health Plans, Inc. subject to the RSU multiplied by the sum of exchange ratio of 3.38 plus the quotient of the per-share cash amount of $120 divided by the volume weighted average sale price of Centene Corporation for the 10 full consecutive trading days. Each outstanding performance stock unit (PSU) of WellCare Health Plans, Inc. that was granted in or prior to 2017, whether vested or unvested, will be cancelled and converted into the right to receive the merger consideration. Further, each other outstanding PSU, whether vested or unvested, will be converted into a restricted stock unit subject to the same terms and conditions, and relating to a number of shares of Centene Corporation equal to the stock award exchange ratio multiplied by (i) for PSUs subject to total shareholder return performance criteria granted in 2018 or thereafter and for each other PSU granted in 2018, a number of shares of WellCare Health Plans, Inc. determined based on actual performance through the first effective time and (ii) for each other PSU granted in 2019 or thereafter, a number of shares of WellCare Health Plans, Inc. based on the achievement of the applicable performance metrics at the target level of performance.

Upon completion of the transaction, shareholders of Centene Corporation will own approximately 71% of the combined entity, with shareholders of WellCare Health Plans, Inc. owning approximately 29%. Centene Corporation intends to primarily fund the cash portion of the acquisition through debt financing, with Barclays Bank PLC providing an $8.35 billion bridge financing commitment, entered into on March 26, 2019. Upon completion of the transaction, WellCare's common stock will cease to be listed on the NYSE and WellCare common stock will be deregistered under the Exchange Act. Centene Corporation will be required to pay WellCare Health Plans, Inc. a termination fee of a maximum of $954.77 million if the Board of Directors of Centene Corporation changes its recommendation in connection with an intervening event. WellCare Health Plans, Inc. will be required to pay Centene Corporation a termination fee of a maximum of $640.43 million if its Board of Directors of changes its recommendation in connection with an intervening event. There are different amounts of termination fee payable by both Centene Corporation and WellCare Health Plans, Inc. in different circumstances. The Board of the combined company will consist of 11 members, nine of whom will be from the board of Centene Corporation and two of whom will be from the board of WellCare Health Plans, Inc. After the close of the transaction, Michael Neidorff will lead the combined company as Chairman and Chief Executive Officer. Ken Burdick and Drew Asher are expected to join the senior management team of Centene Corporation in new positions created as a result of the acquisition. The combined company will be headquartered in St. Louis, Missouri, the location of Centene Corporation's headquarters.

The transaction is subject to approval by shareholders of Centene Corporation and WellCare Health Plans, Inc., clearance under the Hart-Scott Rodino Act, the approval for listing on the New York Stock Exchange of the shares of Centene Corporation to be issued in connection with the transaction, the effectiveness of the registration statement on Form S-4 to be filed with the Securities and Exchange Commission, receipt of required state regulatory approvals and other customary closing conditions. The transaction has been unanimously approved by the Boards of both Centene Corporation and WellCare Health Plans, Inc. A special meeting of stockholders of Centene Corporation and WellCare Health Plans will be held on June 24, 2019 to seek approval for the transaction. The WellCare Special Meeting of stockholders to vote on the transaction is scheduled to take place on June 24, 2019. As of May 22, 2019, U.S. Department of Justice requested additional information about the acquisition, extending the review past the 30-day waiting period. As of May 23, 2019, Centene and WellCare filed a definitive joint proxy statement and prospectus with the U.S. Securities and Exchange Commission in connection with the transaction and the Boards of Centene and WellCare unanimously recommend that stockholders vote in favor of the transaction. The SEC declared the Registration Statement effective on May 23, 2019. As of June 12, 2019, Institutional Shareholder Services recommends that Centene and WellCare stockholders vote for all transaction- related proposals at the respective special meetings of stockholders regarding the acquisition of WellCare. As of June 24, 2019, the stockholders of Centene and WellCare Health Plans have approved the transaction. Additionally on June 24, 2019, Centene and WellCare each received a request for additional information and documentary information and materials from the Department of Justice ("DOJ"). As of July 23, 2019, Centene and WellCare are working through the state insurance approval process required for the completion of the transaction. The required Form As and Es have been filed in 27 states. Conditional approvals have been obtained in eight states, which is ahead of schedule. As of September 19, 2019, the insurance departments of 17 US states have approved the transaction. As of October 18, 2019, 5 additional State insurance departments approved the acquisition. As of October 22, 2019, the transaction is approved by New York Department of Financial Services and Department of Health. The transaction is expected to close by January 23, 2020. The transaction is expected to be slightly dilutive to adjusted earnings per share in year one. The transaction is expected to generate adjusted diluted earnings per share accretion of approximately mid-single digits in year two following closing.

Allen & Company LLC, Barclays Capital Inc., Evercore and J.P. Morgan Securities LLC acted as financial advisors to Centene Corporation. Paul Schnell, Jeremy London, Clifford Aronson, Elliot Silver, Todd Freed, Michael Homison, Steven Messina, Laura Kaufmann Belkhayat, Erica Schohn, Gavin White of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors for Centene Corporation. Goldman Sachs & Co. LLC acted as financial advisor to WellCare Health Plans, Inc. and Sarkis Jebejian, Michael Brueck, Keri Schick Norton, Romain Dambre, Michael Krasnovsky, Kate Coverdale, Malhar Naik, Mark Kovner, and Jeffrey Ayer of Kirkland & Ellis LLP acted as its legal advisors for WellCare. Morrow Sodali, LLC and Saratoga Proxy Consulting LLC acted as proxy solicitors for Centene and will be paid fee of $19,000 each. Innisfree M&A Incorporated acted as proxy solicitors for WellCare Health Plans with a fee of $0.06 million. Barclays will receive a fee of $37.5 million, of which $3.75 million has been paid on upon the delivery of its opinion. Goldman Sachs will be paid $44 million as fee which is contingent upon consummation of the merger. Locke Lord LLP acted as the legal advisor to WellCare.


Centene Corporation (NYSE:CNC) completed the acquisition of WellCare Health Plans, Inc. (NYSE:WCG) on January 23, 2020. As a result, WellCare common stock will cease trading as of the close of trading on January 23, 2020. Proceeds of $7 billion senior note were used to finance the cash consideration of the deal. On January 23, 2020, the size of the Board OF Centene Corporation was increased to 12 Directors and William Trubeck and James Dallas were elected to serve on the Board as a Class II Director and a Class III Director, respectively. In addition, James Dallas was appointed to the Nominating and Governance Committee of the Board and the Technology Committee of the Board, and William Trubeck was appointed to the Compensation Committee of the Board.