Aetna is buying Coventry Health Care for $US5.7 billion ($A5.49 billion) as the US insurance industry realigns itself to better navigate the massive government health care overhaul.
Aetna will pay a total of $42.08 for each share of Coventry stock. That includes $27.30 in cash and a portion of its stock.
The price represents a 20 per cent premium on Coventry's Friday closing price of $34.94.
The deal is valued at $7.3 billion, including Coventry's debt.
Aetna said on Monday the deal will help its Medicare Advantage businesses, and it will grow the insurer's Medicaid business.
Medicaid is the state-federal program that provides coverage for the needy and disabled. It is targeted for expansion under the health care overhaul.
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