Sign in Subscribe
Insurance industry

Aetna Inc. Reaches Eight-Month High as it Renews Talks to Sell Financial Services Unit

Strategic Insights

— 1 min read

Aetna Inc. has been under pressure from shareholders for its sagging stock price, but the company recently reached an eight-month high after announcing it was in discussions to sell its financial services and international businesses to ING Group. The health insurance giant initially rejected a bid from ING and Wellpoint Health Networks Inc. to buy the entire company, opting instead to split its healthcare and financial services businesses into two separate public companies. However, with major shareholders continuing to pressure the company, Aetna renewed talks to sell the financial services division to ING. As a result, Aetna's stock rose as much as $7.25 to a high of $69.94. A Lehman Brothers report estimated that Aetna could receive $51 to $64 a share for the financial services unit, which had revenue of $4.3 billion in 1999.

Key Takeaways:

  • Aetna Inc. has reached an eight-month high after renewing talks to sell its financial services and international businesses to ING Group.
  • The company had initially rejected a bid from ING and Wellpoint Health Networks Inc. to buy the entire company but decided to split its healthcare and financial services businesses into two separate public companies instead.
  • Aetna's stock rose as much as $7.25 to a high of $69.94 following the announcement, while a Lehman Brothers report estimated the company could receive $51 to $64 a share for the financial services unit.
  • The financial services unit had revenue of $4.3 billion in 1999 and employs more than 2,500 people in Jacksonville.
  • Aetna's health care division, which had revenue of $20.9 billion in 1999, employs more than 2,500 people in Jacksonville and is not included in the discussions with ING.
  • Aetna CEO William H. Donaldson stated that the company remains committed to its goal of improving its leadership position, financial performance, and relationships with physicians, hospitals, and patients.

Statistics:

  • Aetna's stock rose by $7.25 to a high of $69.94.
  • The financial services unit had revenue of $4.3 billion in 1999.
  • The health care division had revenue of $20.9 billion in 1999.
  • Aetna may receive $51 to $64 a share for the financial services unit, according to a Lehman Brothers report.
  • The financial services unit employs more than 2,500 people in Jacksonville.
  • Aetna has 3,700 employees worldwide.

Sources:

  • Aetna Inc. press release
  • Lehman Brothers report
  • CNBC report
  • Securities and Exchange Commission filing for Winners Internet Network Inc.

Read more