Adding Humana's large business in Medicare Advantage, the federal health care program for seniors, would make Humana the nation's largest Medicare Advantage provider.
The purchase price includes a combination of cash and stock worth about $230 per share.
Hartford, Conn.-based Aetna says it will retain Humana's Louisville, Kentucky, headquarters as the base for its Medicare, Medicaid and military Tricare businesses.
Analysts say the health care overhaul has pushed the insurers to consolidate, and a big deal has been expected for weeks.
A bigger insurer can gain more leverage and negotiating power when they hash out rates with care providers.
Governor Steve Beshear issued the following statement regarding the sale:
"In addition to the information contained in the news release, I have spoken to Bruce Broussard, CEO of Humana, this morning and Mark Bertolini, CEO of Aetna, earlier this week. Based upon all the information available, I am cautiously optimistic that this merger will be a net positive for Louisville and the Commonwealth. Both Humana and Aetna are progressive, innovative companies in the health care field, and that bodes well for the new entity because of the rapidly changing health care landscape. Mayor Fischer and I look forward to further conversations with both Mr. Broussard and Mr. Bertolini about the details of the transaction and the potential for the growth of jobs in Kentucky. Both of us are also pleased that the Humana Foundation will be separated out of the transaction and will remain in Louisville.”
