How The $54.2 Billion Anthem-Cigna Deal Benefits Both The Companies

Anthem Inc ANTM announced on Friday that it will be buying competitor CIGNA Corporation CI in a $54.2 billion cash and stock deal.

Ana Gupte, Leerink Partners senior health care analyst, was on CNBC to discuss the deal and how it benefits the shareholders and both the companies.

Not Expected Anthem Raising Bid

"It's a very attractive multiple," Gupte began. "I had not expected that Anthem would raise the price much and , I think, our expectations have been generally in line. So, $188 is really attractive, shareholders should be very happy."

Mutually Beneficial

Gupte was asked how this deal will benefit both the companies. She replied, "I think, this transaction is attractive both strategically and financially...Financially they are guiding to almost $2 billion in synergies. There's huge [...] potential to become more efficient, there are also medical costs synergies."

"But, additionally, I think, the transaction is pretty strategic particularly for Anthem that has been looking I believe to get to a national footprint. This gives them some independence, if you will, from the other not for profit Blue Cross Blue Shields in the 36 states that they do not have a Blue Cross Blue Shield license."

"Secondly, with Cigna they get more complimentary capabilities for the employer market. Cigna is terrific in the self insured plus stop-loss market and Anthem is very good in group commercial risk and in public exchanges. [Put] together they offer a full [suite] of services and capabilities for employers," Gupte concluded.