Aetna’s mergers and acquisitions strategy is mainly targeted at expanding the company’s markets and building its technology capabilities. From 2010 to 2014, the company spent about $10.8 billion in strategic acquisitions.
The above graph shows the total M&A deal count for Aetna (AET) and its major competitors: UnitedHealth Group (UNH), Cigna (CI), and Centene (CNC) from 2010 to 2014. Aetna’s major strategic acquisitions involve Healthagen, Medicity, Coventry Health, bswift, and InterGlobal.
In 2010, Aetna acquired Medicity, which provides HIE (health information exchange) technology solutions. This technology enables hospitals, physicians, and health exchanges to securely access and exchange information, leading to coordinated care and better outcomes in terms of quality and cost of care.
In 2011, Aetna acquired mobile health startup Healthagen, which has developed a health application called iTriage. iTriage helps users select the appropriate healthcare facility based on their needs and geographical location through mobile and Internet applications. The acquisition was a part of Aetna’s strategy of increasing consumer engagement through high-end technology.
In 2012, Aetna acquired Coventry Health, a managed health care company, for $7.3 billion, including Coventry’s debt. This acquisition enabled Aetna to rebalance its portfolio and increase its revenue exposure to the fast-growing government-sponsored segment, involving Medicare and Medicaid, from 22% in 2010 to 38% in 2014. Coventry Health added about 4 million members, including Medicare, Medicaid, and commercial enrollees and 1.5 million prescription drug enrollments to Aetna’s member list.
Aetna is one of the private health insurance companies (XLV) in the US that has entered international markets to take advantage of underpenetration of health insurance services and favorable demographics. In 2014, Aetna acquired InterGlobal, a company that specializes in international private medical insurance in the Middle East, Asia, Africa, and Europe.
Aetna acquired bswift, a private exchange platform, in 2014. The company provides technology to improve the buying experience of members purchasing Aetna’s plans.