INDIANAPOLIS -- WellPoint Inc., the nation's largest health insurer, moved yesterday to expand its reach by acquiring New York-based WellChoice Inc. in a move analysts said would thwart competition but one that physicians said could be bad for customers.
The deal, valued at $6.5 billion in cash and stock, gives Indianapolis-based WellPoint an important inroad into the New York area with 5 million new customers and access to nationwide accounts, company officials said.
WellPoint said it would pay $77.23 in cash and stock for all outstanding WellChoice shares, about 9.4 percent more than WellChoice's closing price Monday.
Together, WellPoint and WellChoice will serve more than 33 million members in 14 states.
WellPoint president and chief executive Larry Glasscock said some WellChoice workers will be laid off, but did not specify how many jobs would be affected.
Better known as Empire Blue Cross Blue Shield, WellChoice is the largest health insurer in New York. Previously, a nonprofit, it converted to a profit-making venture in 2002 and went public. It is the last independent, publicly traded, for-profit Blue Cross plan in the country.