HLTH and WebMD to merge in all-stock deal

NEW YORK -- HLTH Corp. said Thursday it will complete its merger into health Web site operator WebMD Health Corp. in an all-stock deal.

The companies had agreed to combine in a $2.31 billion cash and stock deal in February 2008, but canceled the deal in October due to financial market turmoil. The companies did not want WebMD to be burdened with HLTH's debt. They said the combination will improve efficiency and add liquidity for WebMD shares.

HLTH owns about 80 percent of WebMd, or 48.1 million shares. Under the deal, each HLTH share will convert into 0.444 shares of WebMD Class A stock. WebMD Class B shares will be retired. HLTH shareholders will own about 80 percent of the combined company, which will keep the WebMD name.

Martin Wygod, the chairman of WebMD and acting CEO and chairman of HLTH, will be chairman of the new WebMD. WebMD CEO Wayne Gattinella will be president and CEO of the company.

Shares of Elmwood Park, N.J.-based HLTH finished at $11.76 Wednesday, and shares of New York-based WebMD closed at $28.21.