WellPoint and WellChoice Complete Merger
Newly Combined Company Expands Role in Creating Affordable Quality Care
Indianapolis, IN and New York City, NY – December 28, 2005 – WellPoint, Inc. (NYSE: WLP) and WellChoice, Inc. (NYSE: WC) announced the completion of their merger today. The companies’ agreement to merge was announced September 27, 2005. Under the terms of the agreement, WellChoice stockholders will receive $38.25 in cash and WellPoint stock at a fixed exchange ratio of .5191 of a share of WellPoint stock for each share of WellChoice stock. The value of the transaction as of September 26, 2005, was approximately $6.5 billion.
“Our focus as a combined company is to become the most trusted choice for consumers and a leader in affordable quality care,” said Larry C. Glasscock, chairman, president and chief executive officer of WellPoint, Inc. “We will accomplish this through continuous innovation and investment in our products and services that enable consumers to make better informed health decisions and through working collaboratively with health care professionals in order to improve the safety and quality of care patients receive.”
Michael Stocker, M.D., president and chief executive officer of WellChoice, now serves as president and chief executive officer of the newly formed East Region of WellPoint. He has responsibility for business operations in New York, Connecticut, Georgia, Maine, New Hampshire and Virginia. He will also serve on WellPoint’s Executive Leadership Team and report to Glasscock.
“The completion of this merger is very good news for all of our constituencies as WellPoint is uniquely positioned to become the most valued company in our industry,” said Michael Stocker, M.D., president and chief executive officer of WellPoint’s East Region. “Our objective, within the new East Region and across our company, is to further build a highly customer-focused and efficient organization, based upon our local market expertise and our regional and enterprise best practices.”
WellPoint, Inc. now serves approximately 34 million medical members through its Blue Cross or Blue Cross and Blue Shield operations in 14 states and its non-Blue branded operations in other states. The company now has over 42,000 associates nationwide.
John E. Zuccotti, who served on the WellChoice Board of Directors, will now join the WellPoint Board. Zuccotti is currently the Chairman of Brookfield Financial Properties and Of Counsel at Weil, Gotshal & Manges LLP. A significant portion of his career has been in public service roles including serving as the First Deputy Mayor of the City of New York under Mayor Abraham D. Beame.
“We are delighted that John Zuccotti will be joining the WellPoint Board. We look forward to benefiting from his keen insights, deep track record of leadership and public service experience,” added Glasscock.
WellPoint, Inc. expects earnings in 2006 to reach approximately $4.51 per share. Approximately $25 million in synergies are expected to be realized in 2006 from the merger and at least $125 million in annual synergies are expected to be realized beginning in 2010. This transaction is expected to be neutral to 2006 earnings per share and accretive thereafter. Further details on 2006 guidance reflecting the impact of the WellChoice merger will be provided during the company’s fourth quarter earnings conference call.
Contacts:
Investor Relations
Tami Durle, (317) 488-6390
Media
Ed West, (317) 488-6100
Deborah Loeb Bohren, (212) 476-3552