Filed by AETNA Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: AETNA Inc.
Commission File No. 001-11913
From: The Office of Bill Donaldson
Sent: Thursday, July 20, 2000 3:55 AM
To: *Aetna USHC Employees.; *Corporate Center Employees
Subject: Current Challenges, Future Prospects
This is a historic day for Aetna. Our announced sale of our financial services
and international businesses to ING Group means Aetna will represent one
business: the nation's largest health care benefits company, with 19.5 million
health members, 14.8 million dental members and 11.5 million group insurance
members. After this sale closes, Aetna U.S. Healthcare, Aetna Group Insurance,
Large Case Pensions and Aetna Global Benefits will become the "new Aetna."
Going forward, your job and mine is to focus on one primary goal: becoming the
premier health care company in terms of value delivered to shareholders, plan
sponsors, members and other important constituencies.
I believe we can reach our potential by keeping in perspective who we are, what
we do and by aggressively carrying out our plans to revamp our business model,
while implementing a strategy that will allow us to be on the leading edge of
health care in the future.
Our health company has considerable competitive strengths: broad geographic
reach, strong market positions, a large membership base, comprehensive product
offerings, extensive provider networks and information technology expertise.
Most important, we have a dedicated corps of employees who are recognized
experts in their fields.
While Tuesday's announcement regarding rising health costs indeed was a
disappointment, I believe it also serves to underscore the importance of
following through on the work we already have begun in our health business.
We are working diligently to improve our financial performance and to restore
our relationships with physicians, hospitals and members. We are taking
concrete steps to better leverage the strengths I mentioned above. We are
remaking our business model to keep pace with the evolution of the marketplace
to a more consumer-centric health system that offers more customization,
flexibility and choice.
While you will be hearing more about our specific initiatives in the coming
weeks, our plans include: -- Restructuring our product portfolio to provide
greater balance in our range of offerings, including the introduction of new
products for January 2001 that focus on meeting consumer desires for greater
personalization, flexibility and choice, and which are priced accordingly; --
Improving relations with doctors and hospitals by eliminating unnecessary
requirements and streamlining processes to eliminate hassles, while negotiating
sensible contracts that meet the needs of all parties; -- Leveraging Aetna's
vast health care information technology assets to meet constituents' demand and
achieve efficiencies; -- Providing increased flexibility to regional management
to address issues that arise locally, where care is delivered; -- Being
selective about which markets to compete in for each of our products, with an
eye toward achieving profitable businesses everywhere we compete; -- Realigning
management and employee incentives to encourage cross-functional cooperation
and solid business results; -- Restructuring sales and broker compensation to
encourage account retention and new business development; and -- Strengthening
management, starting with the selection of a new CEO with dynamic leadership
abilities.
This is a tall order, I know. In fact, working at the "new Aetna" may be
challenging for a while, but I can assure you that it also will be stimulating
and rewarding for all of us.
With our continued best efforts, we can usher in a new era of greater growth
and prosperity for the health business.
Thanks for your continued support.
--Bill
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Aetna will be filing a proxy statement and other relevant documents concerning
the merger with the United States Securities and Exchange Commission (the
"SEC"). WE URGE INVESTORS TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT
DOCUMENTS TO BE FILED WITH THE SEC, BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
Investors will be able to obtain the documents free of charge at the SEC's Web
site, http://www.sec.gov. In addition, documents filed with the SEC by Aetna
will be available free of charge by calling 1-800-237-4273. Documents filed
with the SEC by ING will be available free of charge from the Investor
Relations Department, Strawinskylaan 2631.1077 ZZ Amsterdam, P.O. Box 810, 1000
AV. Amsterdam, The Netherlands 31-20-541-5462.
PLEASE READ THE PROXY STATEMENT CAREFULLY BEFORE
MAKING A DECISION CONCERNING THE MERGER.
This document does not constitute a solicitation by Aetna or its board of
directors of any approval or action of its shareholders.
Aetna and its board of directors will be soliciting proxies from Aetna
stockholders in favor of the merger. You can obtain more information about
Aetna's directors and officers and their beneficial interests in Aetna's common
stock from the SEC's Web site, http://www.sec.gov, and Aetna's Web site,
http://www.aetna.com. Updated information with respect to the security holdings
of these individuals will be included in the final proxy statement to be filed
with the SEC.
CAUTIONARY STATEMENT -- Certain information in this document concerning the
transaction with ING is forward-looking, including statements regarding the
amount of cash per share that Aetna's shareholders are projected to receive
from the transaction, the tax-efficient nature of the transaction, and Aetna's
expectation as to the closing date of the ING transaction. Certain information
in this document concerning Aetna's health business is also forward-looking,
including the future business prospects for Aetna's health business and Aetna's
expectations as to the future impact of certain actions and plans Aetna intends
to implement in its health business. Forward-looking information is based on
management's estimates, assumptions and projections, and is subject to
significant uncertainties, many of which are beyond Aetna's control. Important
risk factors could cause the actual future results to differ materially from
those currently estimated by management. Risk factors that could materially
affect statements made concerning the ING transaction include, but are not
limited to: the capitalization of Aetna on the closing date, including the
number of shares outstanding at that time; the timely receipt of necessary
shareholder, regulatory and other consents and approvals needed to complete the
transaction, which could be delayed for a variety of reasons related or not
related to the transaction itself; the fulfillment of all of the closing
conditions specified in the transaction documents; and the results of, and
credit ratings assigned to, Aetna's health business at and prior to the closing
of the ING transaction. Risk factors that could materially affect statements
made concerning the results of Aetna's health business include, but are not
limited to: continued or further unanticipated increases in medical costs
(including increased medical utilization, increased pharmacy costs, increases
resulting from unfavorable changes in contracting or recontracting with
providers, changes in membership mix to lower premium or higher cost products
or membership adverse selection); the ability to successfully integrate the
Prudential HealthCare transaction on a timely basis and in a cost-efficient
manner and to achieve projected operating earnings targets for that acquisition
(which also is affected by the ability to retain acquired membership and the
ability to eliminate duplicative administrative functions and integrate
management information systems); adverse government regulation (including
legislative proposals to eliminate or reduce ERISA pre-emption of state laws
that would increase potential litigation exposure, other proposals that would
increase potential litigation exposure or proposals that would mandate coverage
of certain health benefits); and the outcome of litigation and regulatory
matters, including numerous purported health care actions and ongoing reviews
of business practices by various regulatory agencies. For further discussion of
important risk factors that may materially affect management's estimates,
Aetna's results and the forward-looking statements herein, please see the risk
factors contained in Aetna's Securities and Exchange Commission filings, which
risk factors are incorporated herein by reference. You also should read those
filings, particularly Aetna's 1999 Report on Form 10-K and Report on Form 10-Q
for the period ended March 31, 2000 filed with the SEC, for a discussion of
Aetna's results of operations and financial condition.
