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UnitedHealth's move to broaden its reach with the purchase of Mid Atlantic came as rival Anthem Inc. (NYSE:ATH - News) unveiled plans to buy WellPoint Health Networks Inc. (NYSE:WLP - News) in a deal valued at more than $15 billion. That would vault Anthem into the top spot, based on plan membership.

Under terms of UnitedHealth's deal, Mid Atlantic shareholders will receive UnitedHealth stock at a fixed exchange ratio of 0.82 of a share for each Mid Atlantic share, plus $18 per share in cash. In total, UnitedHealth said it would issue 38.6 million shares of its stock plus $860 million in cash.

The terms represent a price of $62.49 per share for Mid Atlantic shareholders, a premium of nearly 16 percent over its closing stock price on Friday of $53.88 on the New York Stock Exchange (News - Websites) . UnitedHealth shares closed at $54.25, also on the NYSE.

Shares of Mid Atlantic rose to $60 in pre-market trade on Monday, and shares of UnitedHealth fell to $52.

UnitedHealth said the deal would add immediately to its earnings when the transaction closes.

UnitedHealth has more than 18 million members in its commercial and government plans, while Mid-Atlantic has about 2 million members. The Anthem-WellPoint deal would create an insurance company with combined membership of 26 million.

UnitedHealth added 70,000 commercial members in the third quarter.

Insurers have found it difficult to add members who will yield them profits, as employers cut jobs, shrinking the available pool of consumers able to pay the HMOs.