Near-Simultaneous Deaths Of Two Insurance Mega-Mergers Signals Victory For Antitrust Officials
Within hours of each other, companies involved in the Aetna-Humana merger and the Cigna-Anthem deal threw in the towel.
The Associated Press:
2 Big Insurance Breakups On Valentine's Day
It was a rough day for the already-roiled U.S. health insurance market: One giant merger was abandoned, another is threatened by infighting, and a major insurer announced it will stop selling coverage on public exchanges in 11 states. Both merger deals had already been rejected by federal regulators and judges, but the companies were considering appeals to those decisions. Now they both appear to be off. (Murphy, 2/14)
Reuters:
Aetna, Humana Drop Merger; Cigna Wants To End Anthem Deal
Health insurers Aetna Inc and Humana Inc walked away from their $34 billion merger on Tuesday and Cigna Corp sought to end its deal with Anthem, shelving the industry consolidation they charted to address former President Barack Obama's Affordable Care Act. (Humer and Bartz, 2/14)
USA Today:
Aetna-Humana $37B Health Merger Dies, Cigna-Anthem Fight Over $48B Deal
Reacting to recent court rulings that blocked both transactions on antitrust grounds, Aetna on Tuesday abandoned its planned $37 billion merger with industry rival Humana in an agreement approved by both companies. But Anthem and Cigna battled each other over the fate of their planned $48 billion transaction. Cigna filed a court action to scuttle the tie-up and seek legal damages from its deal partner, while Anthem vowed to press ahead. The developments are the latest corporate fallout from the Obama administration's decision to challenge corporate mergers on anti-competition grounds and seek to block so-called tax inversion deals based on contentions they take unfair advantage of tax loopholes and would erode the nation's tax base. (Bomey and McCoy, 2/14)
Modern Healthcare:
Cigna Seeks More Than $14 Billion In Formal Termination Of Anthem Deal
[Cigna] said the planned $54 billion merger, which was blocked by a federal district court last week on anti-competitive grounds, “cannot and will not achieve regulatory approval” and that calling it off is best for its shareholders. Cigna alleged that Anthem “willfully breached” the merger agreement in a way that made it unlikely the deal would be approved and has harmed Cigna's shareholders. (Livingston, 2/14)
The Washington Post:
Cigna Demands Anthem Pay $14.8 Billion In Lawsuit To Terminate Merger Agreement
An Anthem spokeswoman said the company is still committed to closing its deal with Cigna, signaling the breakup could be messy. In a news release, Cigna announced it had filed a lawsuit in Delaware Chancery Court against Anthem seeking a judgment that the merger agreement had been terminated lawfully and seeking a $1.85 billion termination fee, along with an additional $13 billion in damages. ... Anthem spokeswoman Jill Becher said that Cigna's action was invalid and said the company "does not have a right to terminate the agreement." (Johnson, 2/14)
Bloomberg:
Cigna Faces Off With Anthem, Escalating Fight By Ending Deal
“Valentine’s Day is turning out to be the day of broken mergers,” Evercore ISI analyst Michael Newshel wrote in a note to investors titled “breaking up is hard to do.” (Daurat, 2/14)
The CT Mirror:
Cigna Sues To End Merger Deal, Seeks $15 Billion From Anthem
The Justice Department blocked the merger last summer, saying a marriage of the insurers would kill competition in many markets for large-business health insurance policies, also known as “national accounts.” ... During the month-long antitrust trial that began in early December, Justice Department lawyers argued that, in addition to the antitrust issues, strained relations between the top executives of Anthem and Cigna doomed the merger to failure. (Radelat, 2/14)
The Wall Street Journal:
Antitrust Rulings Put Chill On Health-Insurance Mergers
The fate of both deals represents a victory for the Obama administration’s antitrust officials, who were able to win the cases despite major differences between the two transactions. In the Aetna case, a judge in January said the merger could harm seniors who buy the private Medicare plans known as Medicare Advantage. The Anthem antitrust decision by a different judge last week focused closely on that acquisition’s potential impact on large, multistate employers that offer health coverage to their workers. Both acquisitions came together amid an insurance-industry merger frenzy in 2015, but the dynamics in each have been different. (Wilde Mathews and Kendall, 2/14)
