Published: Thu, February 16, 2017
Business | By Megan Pierce

Aetna And Humana Agree To End Merger Deal

Aetna And Humana Agree To End Merger Deal

The announcement by Aetna and Humana comes less than a month after Bates' decision, and less than a week after another federal judge blocked a proposed merger between health insurance companies Anthem and Cigna.

Cigna ended its merger agreement with Anthem on Tuesday and said it will seek $13 billion in damages from Anthem on top of the $1.85 billion break-up fee outlined in the deal.

But the American Medical Association said last week, after the Anthem-Cigna deal was shot down, that a merger would have created a health care behemoth too large to regulate and with too much control over the lives of consumers.

"Under the terms of the merger agreement, Cigna does not have a right to terminate the agreement".

Cigna Corp. (CI) disclosed in filing Tuesday that it has terminated the merger deal with Anthem Inc.

The companies announced the deal in July 2015, but the U.S. Justice Department sued to block the transaction in last July.

Humana also said it plans to roll out a share repurchase plan in the first quarter of $1.5 billion and will repurchase another $500 million in stock over the rest of the year.

Anthem, which operates Blue Cross-Blue Shield, was trying to buy Cigna for $48 billion. The proposed merger between health insurers Anthem and Cigna also was blocked by a judge. In a statement Tuesday, Anthem argued that Cigna's "purported termination of the merger agreement is invalid" because it does not have the right to terminate the agreement. At a court hearing in August, an Anthem lawyer said there was " contentiousness" with Cigna and that the smaller insurer meant to walk away after the deadline rather than extend the effort. However, Aetna announced publicly that it is putting off the agreement on grounds that the current environment doesn't provide enough feasibility to pursue the merger. Anthem said it remains committed to closing the deal. Aetna also gave up its proposal to sell Medicare Advantage assets to Molina Healthcare Inc.

Another mega-merger between Anthem and Cigna was canceled several hours later, this one did not end as well. The decision was taken following a "no" from the federal court with respect to their deals.

Bertolini's attempt to acquire the rival health insurer was mortally wounded last month when a federal judge ruled the tie-up violated antitrust regulations and would likely lead to higher prices for consumers.

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