Who: United Healthcare Corp. (Minneapolis) to acquire Humana, Inc. (Louisville, Ky.).
When: Proposed acquisition was announced May 28. The $5.5 billion transaction requires shareholder and regulatory approval and is expected to close in the third quarter of 1998. When the story broke, Humana CEO Greg Wolf touted the deal as healthcare's equivalent to the recent Daimler-Chrysler merger in the automotive industry, and analysts immediately predicted that this "industry-defining event" will likely spur another round of HMO mergers and acquisitions as smaller firms try to keep up with the competitive pressure to consolidate.
PR/Marketing Staff Implications: There have been no discussions yet on how the acquisition will affect PR and marketing professionals.
But United says it aims to cut operating cost by 3 to 5 percent when the deal is inked.
Effect on PR/Marketing: Although the marketing teams at both organizations only had a few days to crank out a communications plan, United's corporate communicators relied on a template merger planning strategy that was already in the works months prior to the announcement.
When the announcement was made, it generated 250 media calls for United alone, says Becky Malkerson, United's VP and senior communications officer.
The advanced planning initiative addressed the key communications issues that pertain to most mergers - identifying core audiences and determining the best vehicles to reach them.
For Humana, the strategy involved making communicators "insiders" to the deal, exposing them to as much of the sensitive business implications as possible, says Greg Donaldson, Humana's senior director of corporate communications.
Its communications approach briefed management, government affairs, investor relations, marketing department and corporate communications a few days before the formal announcement on effective talk points.
Acquisition Campaign: Timing of message delivery is everything when a transaction of this magnitude is being proposed, says Malkerson, who has worked on 23 M&As primarily in the banking industry. Since United's core audience targets were already identified by the time Humana was identified as its potential partner - more time was spent on developing talking points and teaming up with Humana on effective message delivery for the two CEOs. The messages include:
- The acquisition's ability to improve care delivery for millions of Americans.
- The complimentary aspects of the deal-United pioneered open-access health plan options and Humana leads the industry in providing healthcare for small businesses.
And to keep Humana employees, particularly on the East Coast, from finding out about the deal in the news, personalized voice mail messages by Humana CEO Wolf informed each employee and corporate newsletters on the merger were distributed the day of the announcement.
Prioritizing the media is the biggest challenge, says Donaldson, whose department received hundreds of media calls in the first two days.
The strategy involves responding to national media first then the media that serves Humana's 16 markets. (United Healthcare, Becky Malkerson, 612/936-7318; Humana, Greg Donaldson, 502/580-3674)