The Justice Department’s final decision on whether to sue to block Aetna’s $37 billion acquisition of Louisville-based Humana could come this week or next, Bloomberg News and other media outlets are now reporting; latest news developments at 4:50 p.m.
The DOJ’s move would represent strong government pushback against consolidation in the health-insurance industry, according to The Wall Street Journal.
The companies could settle a lawsuit before or after one is filed in order to save the deal, according to Bloomberg, perhaps by shedding even more assets than they’ve already offered.
Hartford-based Aetna and Humana will probably fight any lawsuit in court, while Anthem and Cigna are less likely to litigate against the government, Ana Gupte, an analyst at Leerink Partners, told Bloomberg.
The DOJ’s antitrust division is also preparing a suit to block a similar merger between Anthem and Cigna.
Shares of Humana and Aetna fell sharply on the news. At the close of trading, Humana tumbled 3.9%, or $6.26, to $153.38. Aetna fell 2.7%, or $3.21, to $115.15. Earlier in the day, Humana traded as low as $150 — lowest since it hit $148 in February 2015, according to Google Finance.
An Aetna spokesman told The Wall Street Journal it “doesn’t comment on rumors and speculation, but we are steadfast in our belief that this deal is good for consumers and the health-care system as a whole.” Humana spokesman Tom Noland did not immediately respond to a Courier-Journal request for comment.
Justice Department officials are concerned the deals, which would transform the health-insurance industry by turning its five biggest companies into three, would harm customers, according to several people familiar with the situation cited by Bloomberg. “While the companies may offer to sell assets to gain approval for the deals, that’s unlikely to sway antitrust officials, one of the people said,” according to the news service.
Hints of trouble ahead
The DOJ’s opposition isn’t entirely surprising. Less than two weeks ago, Continue reading “DOJ REPORTEDLY SET TO BLOCK $37B HUMANA-AETNA MERGER; OPPOSITION COULD BE DEAL’S DEATH KNELL; HUMANA STOCK DIVES 4%; ANTHEM-CIGNA ALSO SAID IN DOUBT”