Molina Healthcare, Inc. (NYSE: MOH) and Cigna Corporation (NYSE: CI) today announced that they have entered into a definitive agreement pursuant to which Molina will acquire Cigna’s Texas Medicaid and Medicare-Medicaid Plan (MMP) contracts and certain operating assets. As of December 31, 2020, Cigna’s Texas Medicaid and MMP business served approximately 48,000 Medicaid members in the STAR+PLUS program in the Hidalgo, Tarrant, and Northeast service areas, and approximately 2,000 MMP members in the Hidalgo service area, with full year 2020 premium revenue of approximately $1.0 billion.
Molina said in a statement: “Acquiring Cigna’s Texas Medicaid business provides us with a stable base of membership and revenue that will deepen Molina’s service offerings in Texas, allowing us to meet the needs of thousands of additional Medicaid and MMP members. The transaction demonstrates continued execution and is nicely representative of our growth strategy.”
Cigna said in a statement: “We are proud of the positive impact we have made on customer lives through our Texas Medicaid business, and are confident that Molina will build on our work to improve their health, well-being, and peace of mind. We remain fully committed to the state of Texas, and look forward to continuing to bring affordable, predictable, and simple health care solutions to the millions of Texans we serve through our Medicare, Commercial, and Health Services businesses.”
The purchase price for the transaction is approximately $60 million and Molina intends to fund the purchase with cash on hand. The transaction is expected to be immediately accretive to Molina’s adjusted earnings per share. The transaction is subject to receipt of applicable federal and state regulatory approvals and the satisfaction of other customary closing conditions. It is expected to close in the second half of 2021.