HEALTH SYSTEMS, FOUNDATION HEALTH FINALIZE MERGER DEAL : UNION ESTIMATED AT $1.34 BILLION.Byline: Dave McNary Daily News Staff Writer Two of California's biggest health maintenance organizations, Health Systems International Inc. and Foundation Health Corp., completed their $1.34 billion merger Tuesday. The deal, which has been opposed by the California Medical Association and several consumer organizations, creates the nation's fourth-largest publicly held managed-care company with 5 million members in 17 states and annual revenues of more than $7 billion. Despite arguments that the HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, will raise rates and reduce competition, state regulators cleared the transaction Monday. Health Systems, which has headquarters in Woodland Hills and Pueblo, Colo., and Foundation Health of Rancho Cordova Rancho Cordova (răn`chō kôrdō`və), uninc. residential city (1990 pop. 48,731), Sacramento co., N Calif. A suburb of Sacramento, it experienced rapid growth in the late 20th cent. , Calif., will be renamed Foundation Health Systems and its stock will start trading on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol FHS FHS - Filesystem Hierarchy Standard . The companies have not decided if FHS will keep the three headquarters but they have identified $110 million in annual cost savings from consolidation of overhead and administration, cross-selling and combined contracting. A spokesman said no decision has been made on whether the cost cutting will lead to job reductions. Health Systems had 2,439 full-time job slots in Woodland Hills at the end of last year. The deal, dubbed dub 1 tr.v. dubbed, dub·bing, dubs 1. To tap lightly on the shoulder by way of conferring knighthood. 2. To honor with a new title or description. 3. a merger of equals, received approval from shareholders of both companies Feb. 12. Foundation Health shareholders will own 61 percent of the new company, and six of the company's directors will be Foundation nominees, including Chairman Daniel Crowley. Malik Hasan, chairman and chief executive of Health Systems, becomes president and chief executive and will take the chairman's title in a year from Crowley. Jay Gellert Jay Gellert (born 1956 in New York City, New York) is the current CEO and President of Health Net, Inc. , president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of Health Systems, will be executive vice president and chief operating officer. Each Foundation Health share will be swapped for 1.3 shares of the new stock while each Health Systems share will exchange for one share of the new company. Foundation Health shares rose 37.5 cents to $36.875 while Health Systems shares gained 12.5 cents to $28.25. |
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