HEALTHEON-WEBMD: Shareholders Give Okay to Merger
Shareholders of Healtheon Corp., WebMD Inc., Mede America Corp., and Medcast parent company Greenberg News Networks Inc., yesterday approved a four-way merger to create Healtheon/WebMD Corp., setting the stage for a profile-boosting media alliance with Rupert Murdoch's News. Corp., the Wall Street Journal reports. The new company, which boasts 60,000 subscribing physicians and responsibility for 500 million electronic health care transactions annually, "aims to dominate the race to reduce inefficiency in the U.S. health care system by linking its fragmented participants over the Web." The combined company offers medical information via the Internet to doctors, patients and health care companies. "We're establishing the biggest health care brand ever," said Jeffrey Arnold, CEO of WebMD and the new company. Facing intense competition from dr.koop.com, Medscape Inc., and Mediconsult.com, the firm is now under strong pressure to "deliver value to consumers and doctors," according to the Journal. Officials will unveil a new Web site next week and will lay out their future plans for analysts. "The bottom line will be what do the doctors want to use, and will they use it in their daily routine?" said Stephen DeNelsky of Credit Suisse First Boston. The Healtheon- WebMD merger was valued at about $4.8 billion, while the Mede America and Medcast transactions weighed in at $483 million and $113 million, respectively. Corporate functions will be headquartered in Atlanta, and technology operations will remain in Healtheon's base, Santa Clara, CA (Carrns, 11/12).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.