State to Review PacifiCare-FHP Merger Plans
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CYPRESS — PacifiCare Health Systems Inc.’s $2.1-billion offer for FHP International Corp. is being reviewed by the California attorney general’s office, PacifiCare said in a 1,400-page regulatory filing.
The review comes on top of an investigation by the Federal Trade Commission, which has raised antitrust questions about the combination of the two health maintenance plans.
In August, Cypress-based PacifiCare said it would buy FHP, based in Santa Ana, in a move that would give the combined company 15% of the market for health maintenance plans serving Medicare patients in California. The federal Medicare program covers health insurance costs for elderly Americans.
State Atty. Gen. Dan Lungren’s office “has expressed interest in analyzing the potential effects of the mergers in California,” PacifiCare said in a filing Monday with the Securities and Exchange Commission. “PacifiCare and FHP have voluntarily agreed to provide information to the California Attorney General,” the company said in its filing.
David Erickson, PacifiCare director of investor relations, said the company doesn’t expect the reviews to delay plans to complete the deal in January. The FTC must approve the acquisition, but Erickson said he doesn’t believe that the deal must also be approved by the attorney general before it can be completed.
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