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(Updates with closing share price in fourth paragraph.)
Jan. 9 (Bloomberg) -- Health Net Inc., the fifth-largest health insurer by revenue, is selling its Medicare stand-alone prescription drug plan to CVS Caremark for about $160 million.
Health Net, which already partners with CVS on some services for its customers, expects to gain $140 million in net cash from the transaction after taxes and other costs, the Woodland Hills, California-based company said in a statement. The plan includes 400,000 members in 49 states using Medicare, the U.S. health program for the elderly and disabled.
“Given our ongoing relationship with CVS Caremark, we are confident that the transition of members will proceed smoothly with no disruption in services,” said Jay Gellert, Health Net chief executive officer, in the statement.
Health Net gained 3.4 percent to $33.91 at 4 p.m. in New York. The shares gained 19.4 percent in the past 12 months before today. CVS Caremark rose less than 1 percent to $41.79.
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