Managed-care insurer Centene Corp. will retain two top executives of WellCare Managed Health Plans in leadership positions upon completion of its $17.3 billion acquisition of the company, Centene announced Friday.
WellCare CEO Ken Burdick and Executive Vice President Drew Asher will join Centene in executive leadership jobs, reporting directly to Michael Neidorff, chairman and CEO of St. Louis-based Centene.
"Ken and Drew are accomplished executives, each with a strong track record of success that includes building WellCare into the high-performing company it is today," Neidorff said in a written statement. "We look forward to leveraging the strengths of our combined organization to realize the benefits of this transaction for all our stakeholders."
"I am very pleased to have made this commitment and believe this announcement will help advance the effective integration of our two companies upon closing," Burdick said in a written statement.
Centene and WellCare announced in March that they had agreed to combine. Their focus is government-sponsored healthcare programs, including Medicaid, Medicare and Affordable Care Act marketplace plans. They expect the merger to close by the first half of 2020, subject to shareholder approval.
The American Hospital Association urged the U.S. Justice Department to "investigate thoroughly" the merger, arguing it will reduce competition in the Medicaid managed-care and Medicare Advantage markets. Combined, the two insurers would cover nearly 22 million people in Medicaid, Medicare Advantage and exchange plans.
The AHA said the two insurers' markets overlap in several states, and that they control more than half of the Medicaid market in Florida, Georgia and Illinois.
Centene and WellCare recently disclosed that the Justice Department has asked for more information on their merger plans. They said they each received requests for "additional information and documentary material" on May 22, but didn't offer more detail about what the Justice Department is seeking.
Requests for more information are common. Merger partners CVS and Aetna as well as Cigna and Express Scripts received such requests while their deals were being reviewed by the Justice Department. Both those mergers closed late last year.
Centene said it expects to announce additional details on the merged company's organizational structure and leadership team on June 14.
Shareholders from the companies are slated to vote on the merger on June 24.
Centene's stock was trading at around $57 per share midday Friday, while WellCare was trading at around $276.
Correction: The originaly article stated that the AHA asked the Justice Department to halt the merger.