UnitedHealth Group Inc. of Minnesota jumped a big hurdle in its bid to buy Cypress-based PacifiCare Health Systems Inc. when state Insurance Commissioner John Garamendi gave conditional approval for the deal Monday.
UnitedHealth must target some $255 million in investments and charitable donations to poor areas in order to complete the $9.2 billion buy.
Garamendi, in a release, said that PacifiCare and UnitedHealth must not pass on the costs of the acquisition to health plan subscribers. They also must pledge to continue providing plans and service to current customers.
Garamendi said any agreement between the state and the health plan providers was enforceable in court.
“I made it clear from the outset of negotiations that we would follow the template of strong consumer protection set by my approval of the Anthem/WellPoint merger last year,” Garamendi said. “I am pleased that both companies agreed to those terms and we are satisfied with the result.”
The commissioner said the state’s conditions for approval was based on the deal’s $300 million in bonus payments to executives.
Garamendi said the companies had agreed in principle to the terms.
