Negotiating Leverage

By bulking up, insurers gain more power to negotiate prices with hospitals and doctors, as well as with clients such as employers. Anthem has about 38.5 million medical clients, while Cigna has 14.7 million.

Together, Anthem and Cigna would have about 53 million members, more than UnitedHealth Group Inc., currently the largest U.S. health insurer and the only one of the big five without a merger partner. The deals are certain to attract close scrutiny from antitrust regulators.

The deal also helps Anthem expand in states such as Florida and Texas, Swedish, 64, told investors on a June 22 conference call. Insurers also are competing to capture the 20 million customers who probably will buy coverage through markets created by the Patient Protection and Affordable Care Act next year.

Credit Suisse Group AG and UBS Group AG advised Anthem on the transaction, while Cigna got help from Morgan Stanley. Legal advisers were White & Case LLP for Anthem and Cravath, Swaine & Moore LLP for Cigna.

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