(Adds background, details on vote; Updates share price)
June 24 (Reuters) - Shareholders of Centene Corp and WellCare Health Plans Inc voted in favor of a merger of the health insurers, setting the stage for the creation of a major new player in government-sponsored healthcare plans.
The $15.27 billion buyout of smaller rival WellCare would help Centene bulk up its government-backed Medicare and Medicaid businesses.
As the Trump administration steps up its efforts to strike down the healthcare law introduced by former President Barack Obama, the merger would also help Centene reduce its exposure to Obamacare healthcare exchanges.
Analysts have noted that the health insurer would be among the most vulnerable companies if the law were to be overturned as Centene's Obamacare business accounts for about 40% of its earnings.
However, the WellCare offer was met with criticism by hedge funds that saw Centene as a good target for Humana Inc, a larger Medicare-focused company.
Humana earlier this month said it would not bid for Centene and proxy firm Institutional Shareholder Services recommended that shareholders vote for the WellCare deal.
Shareholders holding about 85% of Centene common stock and those with nearly 83% of WellCare shares cast their vote at the Monday meetings. About 99% of the voters at each company supported the merger.
Centene and WellCare said it had received requests for additional information from the U.S. Department of Justice. The companies are also working through the 26-state insurance approval processes required for the deal.
Centene had previously said it would also have to make some divestitures in Nebraska and Missouri for the deal to go through. The insurers said they expect the deal to be completed by the first half of 2020.
The combined company will have 22 million members, up from around 14 million for Centene at the end of 2018.
Centene shares fell 1.9% to $55.31, while WellCare dropped 1.3% to $295.4 in afternoon trading. (Reporting by Saumya Sibi Joseph in Bengaluru; Editing by Anil D'Silva and Shounak Dasgupta)