WellPoint Says Purchase of Cerulean on Track

WellPoint Health Networks Inc. in Thousand Oaks, one of California’s biggest insurers, said its $700-million acquisition of Cerulean Cos. remains on track to close by March 31.

WellPoint said in a conference call that it has mailed proxy statements to shareholders of Atlanta-based Cerulean, Georgia’s largest health insurer. Georgia insurance officials are expected to hold a hearing on the transaction Feb. 12 and 13, the company said.

In November, WellPoint raised its offer for Cerulean to $700 million in cash, winning a bidding war with Trigon Healthcare Inc. Both bidders handle Blue Cross and Blue Shield policies. WellPoint, which has almost 100,000 policyholders in Georgia, had offered $500 million in cash and stock for Cerulean in July 1998 before Trigon entered the bidding.

WellPoint said it will use $200 million in cash on hand and $600 million in debt to finance the Cerulean transaction, including $100 million in transaction costs. The acquisition will save WellPoint $7 million this year in administrative costs and $15 million a year once Cerulean’s business is integrated, officials said.

WellPoint, which has about 7.7 million policyholders, said it expects enrollment to grow by 6% to 8% this year. The company said it expects premium revenue to grow by 16% over last year.