Aetna and Humana walk away from merger deal

HARTFORD, Conn. — Aetna and Humana on Tuesday walked away from a joint merger that was originally valued at $37 billion, the companies announced. The companies decided to mutually end their merger agreement following a ruling from the United States District Court for the District of Columbia granting a United States Department of Justice request to enjoin the merger.

U.S. District Court Judge John Bates last month issued his ruling on a lawsuit between the companies and the federal government. The Dept. of Justice had sued on behalf of 264 counties in 21 states where it said a merger would limit competition unlawfully in the Medicare Advantage markets and 17 counties in three states where it said public exchange competition would be limited.
 
“While we continue to believe that a combined company would create greater value for health care consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction,” stated Mark Bertolini, Aetna chairman and CEO. “We are disappointed to take this course of action after 19 months of planning, but both companies need to move forward with their respective strategies in order to continue to meet member expectations. Our mutual respect for our companies’ capabilities has grown throughout this process, and we remain committed to a shared goal of helping drive the shift to a consumer-centric health care system.”

Aetna will pay Humana $1 billion as a result of the termination of the merger agreement. Additionally, Aetna has terminated its previously announced agreement to sell certain Medicare Advantage assets to Molina Healthcare and will pay the applicable fees associated with that termination.

 

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