Aetna

(AET)

announced Sunday it had turned down a $10 billion takeover bid and had instead decided to split itself into two publicly traded companies.

Following a two-day board meeting, the company rejected the offer from

ING America Insurance Holdings

, a unit of

ING Groep

(ING) - Get Report

and

WellPoint Health Networks

(WLP)

, saying the bid undervalued Aetna's assets.

Instead, Hartford-based Aetna will separate its global financial services and health care divisions into two separate companies as soon as it can. It also plans to sell off some of its international assets that do not fit the strategy of either company.

ING had been interested in Aetna's finance division, and WellPoint was eyeing the health care business.

"The financial consideration mentioned in the ING/WellPoint letter, even if taken at face value, significantly understates the value of our company and does not reflect the current value or future potential of our core businesses," Aetna Chairman and CEO William H. Donaldson says in a statement.

His predecessor, Richard Huber, resigned just two weeks ago amid investor dissatisfaction over the company's plunging stock price.

Donaldson is a co-founder of investment bank

Donaldson, Lufkin & Jenrette

(DLJ)

. He had served on Aetna's board since 1977 before being appointed to the top post.

David Rheingold is a New York-based freelance writer. At the time of publication he had no positions in any of the securities mentioned, although holdings can change at any time.