Centene is making a big move into New York state, with a deal to acquire non-profit insurer Fidelis Care’s plans for $3.75 billion.

The asset purchase will bring Centene more than 1.6 million new members in the state, spread across the Medicaid, Medicare Advantage and Obamacare exchange markets.

“We think there is tremendous potential here,” said Michael Neidorff, Centene chairman and CEO, on a conference call with investors Tuesday. “Centene’s and Fidelis Care’s missions are fully aligned in terms of promoting health through high quality, accessible care and services for all and advocating for health policy that accords true dignity and respect for all people, especially the underserved.”

Fidelis Care is the leading New York Medicaid and children’s health plan insurer, operating in all 62 of the state’s counties. Centene already serves the California, Florida and Texas Medicaid and exchange markets. If approved, the Fidelis deal would boost Centene’s national membership to nearly 14 million members, putting it in the nation’s four largest states.

The executives say the transaction is being structured as an asset purchase, rather than an outright acquisition, because of New York state regulations surrounding the sale of nonprofit firms.

“The nonprofit approval process… requires the sign-off by the attorney general,” said Rev. Patrick Frawley, Fidelis Care CEO on the conference call, adding that he was confident that this deal would be approved because of Centene’s commitment to government health plans for lower-income populations.

“We have a strong mission… [and] a good strong business is good mission, ” Frawley said. “I’m confident this acquisition will be [for] the good of our shared mission.”

The executives say Frawley will continue to serve as Fidelis CEO, and the operations will remain headquartered in New York state. It’s not clear whether that will be enough to sway regulators to approve the deal.

“We had to announce this before we had it all signed, sealed and delivered,” said Neidorff.

Still, Centene expects the transaction to close in the first quarter of 2018, and to boost earnings in the first year. Centene also expects $25 million in cost savings in 2018, and another $100 million in 2019. The insurer will finance the deal through an equity sale and $1.6 billion in new debt.

Centene shares rose more 2 percent after hours trading to $93. Earlier Tuesday, the stock hit a historic high of $91.16.

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Centene in a $3.75 billion deal for New York Medicaid leader Fidelis Care – CNBC