Teladoc Health, which provides virtual care services to hospitals and health systems, has signed a definitive agreement to merge with digital health company Livongo.

Under the agreement, each Livongo share will be exchanged for 0.5920x shares of Teladoc Health along with cash consideration of $11.33 for each Livongo share, amounting to a total value of $18.5bn.

Teladoc Health shareholders will own around 58% of the combined company, while Livongo shareholders will own the remaining nearly 42%.

The merger is expected to allow the companies to deliver integrated, personalised, technology-based longitudinal healthcare.

Teladoc Health CEO Jason Gorevic said: “This merger firmly establishes Teladoc Health at the forefront of the next-generation of healthcare.

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“Together, we will further transform the healthcare experience from preventive care to the most complex cases, bringing ‘whole person’ health to consumers and greater value to our clients and shareholders as a result.”

The companies intend to combine their respective expertise in virtual health and chronic condition management for acute and specialty care.

Teladoc Health’s virtual care services will be leveraged along with Livongo’s data-driven actionable, personalised health signals to deliver comprehensive virtual healthcare.

The companies intend to boost cross-selling, leverage their individual client base and focus on Livongo’s expansion to drive revenue synergies of $100m by the end of the second year after the deal completion.

Livongo founder and executive chairman Glen Tullman added: “By expanding the reach of Livongo’s pioneering Applied Health Signals platform and building on Teladoc Health’s end-to-end virtual care platform, we’ll empower more people to live better and healthier lives.”

The board of directors of both companies approved the transaction, which is expected to close by the end of the fourth quarter of this year. The agreement is subject to shareholder approvals and other customary closing conditions.

The combined company will operate as Teladoc Health.