Centene Corporation (NYSE:CNC) entered into a definitive merger agreement to acquire Magellan Health, Inc. (NasdaqGS:MGLN) from a group of shareholders for $2.5 billion on January 4, 2021. As reported, Centene will acquire Magellan Health at a price of $95 per share of Magellan common stock in cash. Centene intends to primarily fund the cash portion of the acquisition through cash on hand, debt financing, public offering proceeds of $1.8 billion. J.P. Morgan has provided a $2.38 billion bridge financing commitment. Magellan Health will operate as an independent company and will cease to be a publicly traded company post-closing. Ken Fasola, Chief Executive Officer of Magellan Health, and other members of Magellan Health's leadership team will join Centene. Ken Fasola will continue to lead Magellan along with members of the executive leadership team. In case of termination of the transaction, Magellan Health will be required to pay Centene a termination fee of $76.53 million.

The transaction is subject to the HSR Act Clearance, the required filings and the required consents having been made or obtained, accuracy of the representations and warranties made in the agreement by the other party as set forth in the merger agreement, subject to certain materiality thresholds, receipt of required state regulatory approvals, the approval of the definitive merger agreement by Magellan Health's stockholders and other customary closing conditions. The transaction is not contingent upon financing. In connection with the transaction, affiliates of Starboard Value LP, which own approximately 9.4% of Magellan Health's outstanding shares of common stock in the aggregate, have entered into a merger support agreement whereby they have agreed to vote their shares in favor of the transaction at Magellan Health's special meeting. The special meeting of stockholders of Magellan Health, Inc. to approve the transaction will be held on March 31, 2021. The transaction was unanimously approved by the Boards of Directors of Centene and Magellan Health. The Board of Magellan Health resolved to recommend that the stockholders to adopt the merger agreement. As of March 12, 2021, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect to the acquisition of Magellan Health Inc. has expired. As on March 31, 2021, Magellan's shareholders have approved the transaction in a virtual special meeting. As of July 27, 2021, U.S. federal antitrust clearance of the transaction has been obtained. On December 30, 2021, Magellan and Centene, announced that they have obtained all required regulatory approvals necessary to close Centene's pending acquisition of Magellan. Transaction is expected to complete during the second half of 2021. The transaction is expected to complete by the end of 2021. Subject to the satisfaction of customary closing deliveries, Magellan and Centene anticipate closing the acquisition on or about January 4, 2022. Centene expects the transaction to be slightly accretive in the first full year and deliver low to mid-single digit percent adjusted EPS accretion from the transaction by the second full year, including approximately $50 million in annual net cost synergies projected by the second full year.

Allen & Company LLC, J.P. Morgan Securities LLC and Barclays Capital Inc. acted as the financial advisors to Centene, and Paul T. Schnell, Micah Kegley, Elena Coyle, Erica Schohn, Jose Esteves, Clifford Aronson, Steven Messina, Laura Kaufmann Belkhayat, Gavin White, Michael Leiter and Jeremy D. London of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal counsels to Centene Corporation. Goldman Sachs & Co. LLC and Guggenheim Securities, LLC acted as the financial advisors and provided fairness opinion and Raymond O. Gietz, Jaclyn L. Cohen, Helyn Goldstein, Amy Rubin, Ade Heyliger, Steven Bernstein, Alexis Brown-Reilly, Rob Meyer, Danek Freeman, Corey Chivers, Janeane Ferrari, Jeffrey Osterman, Marisa Geiger, John O'Loughlin and Nicholas Pappas of Weil, Gotshal & Manges LLP acted as the legal counsels to Magellan Health. Philip Richter and Roy Tannenbaum of Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal advisors to Goldman Sachs and Guggenheim Partners. MacKenzie Partners, Inc. acted as a proxy solicitor to Magellan Health for a fee of approximately $20,000 plus reimbursement of certain specified out-of-pocket expenses. Magellan Health has agreed to pay Goldman Sachs and Guggenheim Securities for their services in connection with the merger an aggregate fee that is estimated at approximately $13 million each, all of which is contingent upon completion of the merger.

Centene Corporation (NYSE:CNC) completed the acquisition of Magellan Health, Inc. (NasdaqGS:MGLN) from a group of shareholders on January 4, 2022. Magellan Health will operate independently under Centene's Health Care Enterprises umbrella. Magellan Health common stock ceased trading prior to the opening of trading on January 4, 2022. Ken Fasola, CEO of Magellan Health, and other members of Magellan Health's leadership team will continue to lead the organization.