Centene Corp. has agreed to buy Magellan Health Inc. in a transaction valuing the target company at $2.2 billion to expand its behavioral health platform.


Centene will pay $95 a share in cash, according to a statement, or 15% above Magellan Health’s closing price on Thursday. The purchase will be primarily funded with debt, and JPMorgan Chase & Co. has provided a bridge financing commitment.

“There is a critical need for a fundamentally better approach to supporting people with complex, chronic conditions through better integration of physical and mental health care,” Michael F. Neidorff, Centene’s chief executive officer, said in the statement. “This has become even more evident in light of the pandemic.”

The purchase, announced on the first business day of the new year, picks up where 2020 left off in terms of mergers. Healthcare companies announced $362.7 billion of deals last year, data compiled by Bloomberg show. In December, for $39 billion deal in the industry’s biggest transaction of 2020.