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Healtheon/WebMD Continues Rival Buyout

Two days after its $4.9 billion purchase of a competitor in the healthcare management space, Healtheon/WebMD Corp. Wednesday spent approximately $313 million on another rival as part of its quest to be the leading medical resource on the Net.

Healtheon/WebMD (HLTH) acquired OnHealth Network Co. (ONHN) , one of its biggest competitors in terms of consumer healthcare Web sites, for approximately $313 million in stock. Shareholders of OnHealth stock are to receive .189435 shares of Healtheon/WebMD Common Stock for each share of OnHealth stock. Closing of the transaction, which will be accounted for as a purchase transaction, is expected in the second quarter this year, subject to regulatory approval.

OnHealth is a consumer site that provides information and community services about health, medicine and wellness. The marriage with Healtheon/WebMD is set to create the most comprehensive source for consumer health information, communities, e-commerce and healthcare transactions on the Internet, they said. Its goal is to become the most trafficked health sites for consumers and physicians.

The two firms anticipate integrating content, advertising and sponsorship programs immediately to leverage the sites' complementary demographics and content focus. Plus, the additional consumer base brought to Healtheon/WebMD can be leveraged to encourage physician adoption and utilization of new Healtheon/WebMD planned services and transactions.

"We believe that this acquisition will increase the direction of consumers to one single portal, supporting our business model of bringing together the physician and consumer to connect them with the entire healthcare industry and facilitate a better healthcare delivery system," said Jeff Arnold, chief executive officer of Healtheon/WebMD. "We will quickly enhance the breadth and depth of our consumer offerings with OnHealth's quality, original content and tools to solidify WebMD's position as the leading Internet portal for health in the broadest sense."

OnHealth's e-commerce partners include American Express, AstraZeneca Pharmaceutical, Merck, The Ford Motor Co., Glaxo Wellcome, Nieman Marcus, Proctor and Gamble and Johnson & Johnson.

The acquisition is the latest in Healtheon/WebMD's shopping spree. The company Monday paid $4.9 billion to acquire Medical Management Corp., and its CareInste.com subsidiary, a provider of management tools for physicians and other healthcare professionals.