Insurer to split in two, rebuffs takeover bid

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Monday, March 13, 2000 | 11:13 a.m.

NEW YORK -- Aetna Inc., the nation's largest health insurer, rejected a $10 billion takeover offer from WellPoint Health Networks and ING Group, instead announcing plans to split its health care and financial services businesses into two publicly traded companies.

The troubled insurer will be separated into two independent, publicly traded companies "as soon as an orderly separation can be achieved," the Hartford, Conn.-based company's board said.

Analysts say Aetna's financial services business, which sells annuities and other investment vehicles, had little in common with its health business.

"Long term this is a very logical move," Jim Lane, an analyst with Salomon Smith Barney, said today. "But it doesn't do a whole lot for shareholders in the short term."