Summary
Deere & Company announced on December 6, 2005, that it has entered into a definitive agreement to sell its wholly-owned managed care subsidiary, John Deere Health Care, Inc., to UnitedHealthcare. This transaction is expected to close by April 1, 2006, and is subject to regulatory approvals. The sale represents a strategic move by Deere & Company to exit the health insurance business it has operated for over 20 years. This divestiture is projected to generate a pre-tax gain of approximately $350 million and an after-tax gain of approximately $225 million for Deere & Company upon closing. While the managed care subsidiary is being sold, Deere has stated that the transaction will not impact the benefits provided to its employees, retirees, surviving spouses, and dependents. The sale will involve UnitedHealthcare acquiring the subsidiary's headquarters building in Moline, Illinois, which is expected to become a regional office for the buyer.
Key Highlights
- 1Deere & Company to sell its wholly-owned managed care subsidiary, John Deere Health Care, Inc.
- 2Acquirer is UnitedHealthcare of Minneapolis, Minnesota.
- 3Sale projected to close by April 1, 2006, subject to regulatory approvals.
- 4Expected pre-tax gain of approximately $350 million from the sale.
- 5Expected after-tax gain of approximately $225 million.
- 6The transaction does not impact benefits for Deere employees, retirees, and their dependents.
- 7UnitedHealthcare will purchase the John Deere Health Care headquarters building in Moline, Illinois.