Healtheon and WebMD to Merge, People Familiar Say (Update1)
Healtheon and WebMD to Merge, People Familiar Say (Update1) (Adds analyst comment, both companies decline comment.)
San Francisco, May 14 (Bloomberg) -- Healtheon Corp., a company that processes health-care transactions over the Internet, will merge with WebMD, which provides medical information and services over the Internet, said people familiar with the transaction.
Healtheon Chairman Jim Clark will be chairman of the combined company, while WebMD Chairman and Chief Executive Jeffrey Arnold will be CEO, the people said. Healtheon's CEO, Mike Long, will be chief operating officer, they said.
Healtheon shares rose as much as 22 percent after news of the planned merger was disclosed by Bloomberg News. The combination gives the companies a head start in the race to dominate the fledgling business of providing health-care information and services over the Internet. ''Healtheon and WebMD were both going to be the Internet superpowers in the short-term,'' said Mark Mulcahy, an analyst with Volpe Brown Whelan. ''These two were going to be pushing the valuations and the boundaries. A combination of the two is tremendously exciting.''
Healtheon shares rose 6 to 53 in late afternoon trading and traded as high as 55.
Healtheon speeds transmission of medical information like insurance claims, physician referrals and laboratory results between health-care providers, physicians and patients. WebMD is more focused on providing services directly to consumers.
Development of the Internet health-care industry ''is going to be a marathon and we're only in the first couple of paces. But a merger like this so soon is definitely positive,'' Mulcahy said.
Officials from the two companies declined to comment.
The two plan to announce the merger on Monday, according to the people familiar with the situation. They declined to provide details on a price.
WebMD, which is closely held, this morning filed with U.S. regulators to cancel plans to go public.
NYSE/AMEX delayed 20 min. NASDAQ delayed 15 min.
|
