Aetna's Takeover Of Humana Blocked As Anticompetitive
Back in August, we reported of a fascinating case of crony capitalism, whereby Aetna gave the DOJ a not too subtle ultimatum which boiled down to the following: “If the Humana deal is blocked, we exit Obamacare.”
Well, be careful what you wish for, because six months later, and with Obamacare well on its way out, moments ago a US federal judge blocked Aetna’s $37 billion deal to buy rival insurer Humana, thwarting one of two large mergers that would reshape the U.S. health-care landscape. The judge’s ruling, which was filed in Federal court in Washington, said the deal would be “anticompetitive”adding that the deal would have hurt competition among insurers.
U.S. District Judge John D. Bates ruled the Justice Department had proven its case that the merger would unlawfully threaten competition.
The judge said the transaction could mean higher prices and reduced services for seniors who purchase the private Medicare plans known as Medicare Advantage. He also said the merger would harm competition on public insurance exchanges in parts of Florida. With the deal now scrapped, Aetna will owe Humana a $1 billion breakup fee.
Of course, with Obamacare on its way out, it would not be a surprise if the insurance companies would not have quietly preferred that the deal was blocked. For now, however, the shareholders of Aetna are less than excited, sending the stock of the company nearly 3% lower, while Humana was rebounded to almost unchanged after plunging as much as 7% in kneejerk reation.