ATLANTA -- Cerulean Cos., the parent of Blue Cross and Blue Shield of Georgia, announced Thursday it will merge with WellPoint Health Networks, parent of Blue Cross of California, in a deal valued at $500 million.
Cerulean brings a "very effective distribution system and a well-established network of providers," to the deal, said Richard Shirk, president of Blue Cross and Blue Shield of Georgia, while Wellpoint brings a strong information management system and small-group marketing skills.
For the 70,000 Georgians who received five free shares of stock apiece when Blue Cross and Blue Shield of Georgia went private two years ago, this deal will mean either $4,000 in cash or stock in Wellpoint, Mr. Shirk said. Shareholders will receive letters over the next few days outlining how they can select which option.
Wellpoint has 28.7 million customers through Blue Cross of California and UNICARE elsewhere in the country. Blue Cross and Blue Shield of Georgia has 1.7 million customers.
Cerulean will keep its headquarters in Atlanta. WellPoint is headquartered in Woodland Hills, Calif.
The deal must be approved by Cerulean shareholders and Georgia insurance regulators, which might take through December of this year, Mr. Shirk said.
Neither shareholder nor regulatory approval is needed in California, he said.
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