Shareholders of PacifiCare Health Systems Inc. are expected to approve UnitedHealth Group Inc.’s $8.1 billion buy of the Cypress-based health plan operator next week.
Approval coming out of the company’s shareholder vote set in Los Alamitos would leave just a few hurdles to clear before the buyout is finalized.
The big one: getting California Insurance Commissioner John Garamendi’s blessing.
Earlier this month, Garamendi said he would deny UnitedHealth’s bid for PacifiCare unless he was assured the deal wouldn’t result in higher premiums for policyholders.
Garamendi has the power to block acquisitions in the insurance industry if he feels they might harm policyholders.
“In short, I am encouraged but not yet convinced that this deal would be good for California consumers,” Garamendi said after a recent hearing on the deal.
PacifiCare said the deal is progressing as expected, even if the process is “challenging,” said Cheryl Randolph, a PacifiCare spokeswoman. In addition to Garamendi’s blessing, the deal still needs to be OK’d in other states where the companies do business.
“We continue to expect the transaction to close by the end of 2005 or early 2006,” Randolph said. “We continue to meet with state regulators in California as well as in other states to address any concerns regarding the proposed merger.”
The acquisition has approval from state insurance departments in Indiana, Nevada and Oklahoma, Randolph said.
PacifiCare also is working with the Department of Justice to complete its look at the proposed deal under antitrust laws, Randolph said.
For more on this story, see the Nov. 14 edition of the Business Journal.
