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Yesterday, Hartford, CT-based Aetna announced that it entered into a definitive agreement to buy Bethesda, MD-based Coventry Health Care for $5.7 billion in cash and stock, a move Aetna said would help it expand further into government-backed programs like Medicaid and Medicare. The deal is considered to be a reaction to the Supreme Court ruling upholding President Obama's comprehensive health care reforms and will help Aetna expand into government-based insurance. Unfortunately for Maryland, the deal also means that the state will lose yet another Fortune 500 company.
The loss of Coventry will be the state's fourth F-500 company loss in four years, leaving Maryland with only three firms on the list of the 500 largest US companies (in terms of annual revenue). Admittedly, Maryland isn't really known for being a business-friendly state (particularly when it comes to large corporations) since its relatively high taxes and regulations, coupled with a liberal government in Annapolis, are often considered hostile to business. To make matters worse, unlike most other liberal states with stiff taxes/regulations, such as California, New Jersey, and Connecticut, Maryland has a large competitor nearby with just the opposite approach to big business.
