Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of health insurer Coventry Health Care (NYSE: CVH) surged 18% today after larger rival Aetna (NYSE: AET) agreed to acquire it for $5.7 billion.

So what: The cash-and-stock deal values Coventry at $42.08 per share -- $27.30 in cash and a portion of Aetna's stock -- and represents a 20% premium to its Friday closing price of $34.94. Aetna is making the move to increase its presence in the high-growth government-sponsored Medicare and Medicaid space, and judging by its own stock jump today, Mr. Market seems pleased with the price being paid to do it.

Now what: In a conference call with analysts, Aetna management said they expect the deal to double Aetna's Medicaid membership and estimated the combined company's 2012 revenue at $50 billion. "Coventry has distinct capabilities and a local market focus that will accelerate our efforts to bring simpler, more affordable products to consumer insurance exchanges in 2014 and beyond," said Aetna Chairman and CEO Mark Bertolini. "Once the transaction is completed, our larger capital base also will enhance our ability to continue to invest in innovation, technologies and capabilities to lead the transformation of the U.S. health care industry." So while Coventry shares are likely all popped out, Aetna's seemingly enhanced position might be worth looking into.

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