The Board of MBF Australia Limited, Australia’s second largest health fund, is recommending a $2.41 billion proposal from Bupa to combine the two businesses and create Australia’s leading private health fund.
Bupa Chief Executive Val Gooding welcomes the Board’s recommendation. “Since entering the Australian market we’ve been actively looking to expand our presence. This merger is an excellent outcome for customers and employees of both health funds as well as the wider Australian health sector. It will create a national health insurer providing enduring benefits for customers. The merged group will have access to a wealth of health expertise, helping to keep private health insurance more affordable for Australians.“
MBF’s Board said the transaction was in the best interests of policyholders and described it as “compelling”.
The merger has already received approval from the Australian Competition and Consumer Commission (ACCC) and other regulatory approvals are being obtained. Subject to acceptance by MBF’s governing council and policyholders, the transaction is expected to be completed in late Spring 2008.
Bupa trades in Australia under the HBA and Mutual Community brands. Bupa first entered the Australian market in 2002 with the purchase of the businesses from AXA Health Australia.
Currently, Bupa Australia covers more than 1 million Australians. With MBF the combined health funds will create a health insurer with a national footprint providing coverage for close to 3 million customers. Bupa Australia currently has a national market share of 10.1 percent. The majority of customers are located in Victoria (543,000) and in South Australia (355,000).
MBF is Australia’s largest, non-government private health insurer covering nearly 2 million people. MBF provides private health insurance throughout Australia and is the number one or number two private health insurer in Queensland, New South Wales, Tasmania and the Northern Territory.