Centene confirmed it has reached a deal to buy rival health insurance provider WellCare Health Plans. The companies said their boards approved a cash and stock transaction that values WellCare at $15.27 billion.

Under the deal, WellCare shareholders would receive a fixed exchange ratio of 3.38 shares of Centene common stock and $120 in cash for each share of WellCare common stock.

In a statement, the companies said the combined business would have estimated pro forma 2019 revenues of approximately $97 billion and $5 billion in EBITDA based on the most recent 2019 outlooks publicly reported. They said they expected to realize approximately $500 million of annual net cost synergies by year two.

Shares of WellCare were up 23% on the news, while shares of Centene fell more than 9% Wednesday morning.

Analysts said the deal would help reduce Centene’s reliance on healthcare exchanges set up under the Affordable Care Act. On Monday, the U.S. Department of Justice said a district court ruling invalidating the ACA did not need to be reversed.

Analyst Ana Gupte at SVB Leerink said about 40% of Centene’s earnings depended on the ACA.

“This transformational combination creates a leading healthcare enterprise that is committed to helping people live healthier lives through a localized approach and provides access to high-quality healthcare through a wide range of affordable health solutions,” said Centene chairman and CEO Michael Neidorff.

Allen & Company, Barclays, Evercore, and JPMorgan Securities are financial advisors to Centene. Goldman Sachs is advising WellCare.

The combined company would have 11 board members – nine from Centene and two from WellCare. Michael Neidorffwill would remain chairman and CEO. Ken Burdick and Drew Asher of WellCare would join the Centene senior management team in new positions created as a result of the acquisition.

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