NEW YORK, May 19 (Reuters) - Internet health sites Healtheon
<HLTH.O> and the privately held WebMD Inc. are expected to merge
in a stock deal that is worth about $5.5 billion and backed by
tech heavyweights such as Intel Corp. <INTC.O>, Microsoft Corp.
<MSFT.O> and Excite <XCIT.O>, the Wall Street Journal reported
on Wednesday.
The idea behind the merger is to build a dominant Web-based
healthcare site that connects doctors and patients, as well as a
launch pad for healthcare electronic commerce, the newspaper
said.
Healtheon's board has given its thumbs up to the merger, and
WebMD's board is expected to vote this morning, the newspaper
said, quoting sources familiar with the deal. The merger would
leave Healtheon and WebMD each owning 50 percent of the newly
combined company, the Journal said. The deal is valued at $5.5
billion because that is the market capitalisation of Healtheon,
which went public in February, the Journal said.
People familiar with the deal say Microsoft, Excite and
Intel will invest about $500 million in the new company, the
newspaper said. Excite, which is about to be bought by At Home
Corp., will invest $20 million to $30 million, while WebMD is
expected to buy $60 million in advertising from Excite.
Microsoft, already an investor in WebMD, is expected to
invest around $200 million dollars, the Journal said. Intel's
investment will make a minor contribution, the newspaper said.
McKesson HBOC Inc <MCK.N> is expected to be another
investor, it said. |
