Georgia Approves WellPoint Health Networks’ Purchase of Blue Cross and Blue Shield of Georgia Parent

Georgia Insurance Commissioner John Oxendine (R) yesterday approved California-based WellPoint Health Networks' acquisition of Cerulean Companies, the parent company of Blue Cross and Blue Shield of Georgia, the Atlanta Journal-Constitution reports. The $700 million deal comes more than two years after WellPoint's first offer, as the acquisition "was delayed by a lawsuit by would-be shareholders and a last-minute bidding war" that drove up Cerulean's price by $200 million. Oxendine said that his initial concerns about Blue Cross having a parent company in California were alleviated at a hearing last month in which WellPoint "pledge[d] that [Blue Cross'] day to day operational decisions will continue to be made in Georgia" (Miller, Atlanta Journal-Constitution, 3/14). "I believe approving this transaction will have a positive effect on all concerned. I wanted shareholders and consumers to receive the greatest possible value from this proposed transaction," Oxendine said. As part of the deal, Healthcare Georgia Inc., "a foundation set up by a group of charities and funded by Cerulean," will receive a $123.7 million endowment (Bankston, Augusta Chronicle, 3/14). Under the agreement, Blue Cross, the state's largest health insurer with 1.8 million members, "will retain its name and company headquarters in Atlanta." WellPoint said that the agreement "will be finalized within the next few days" (Atlanta Journal-Constitution, 3/14).