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INDIANAPOLIS-Anthem Inc.'s acquisition of Acordia Inc.'s outstanding stock will fold Acordia's health care operations into Anthem, paving the way for the eventual divestiture of Acordia's brokerage business.

Early last week, Anthem, which owns 66.8% of the world's fifth-largest broker, announced a tender offer for all of Acordia's remaining outstanding common stock at $40 per share.

The entire deal, which includes stock, warrants and options, is valued at approximately $190 million.

Anthem, a mutual insurance company, raised $49 million after receiving authorization for an initial public offering of up to 5.5 million shares of Acordia stock to the public in 1992. The shares were sold at an initial price of $14.50 each.

Acordia's stock closed at $39.75 on Friday.

Anthem intends to focus on its health care business and to drive more cost out of its operations, said Keith A. Maib, Acordia's executive vp and chief financial officer.

Anthem announced in February that it had retained Credit Suisse

First Boston to help explore the possible sale of Acordia's property/casualty brokerage business and the possible reorganization of Acordia's health business (BI, Feb. 10).

A little more than half of Acordia's $661 million in 1996 revenues was generated by its property/casualty brokerage business. The remaining came from the sale and servicing of Anthem's health insurance products.

Mr. Maib confirmed Anthem is still in discussions with a third party about the possible sale of Acordia's brokerage business.

Acordia will not comment on marketplace rumors that a management buyout is in the offing (BI, May 26).

Buying Acordia's stock "paves the way for the process to occur," Mr. Maib said of a possible sale. In addition, it makes organizational and operational changes at Anthem easier and more efficient, he explained.

By buying Acordia first and selling its brokerage business later, Anthem "has one less constituency to deal with," suggested Jay Cohen, an analyst with Merrill Lynch Inc. in New York.

Timothy J. Cunningham, a principal with Insight Management Consulting Group in Westchester, Ill., noted that "fundamentally, if Anthem owns 100% of Acordia, it potentially gives them more strategic options."

The tender offer for Acordia's shares commenced June 6 and must remain open for 20 business days, which puts the completion date at July 7, Mr. Maib said.

If a deal to sell the brokerage business is in the offing, "it is unlikely it will occur before the completion of the tender offer," he said.