Federal Judge Blocks Aetna-Humana Merger on Antitrust Grounds -- Update
January 23 2017 - 11:28AM
Dow Jones News
By Brent Kendall
WASHINGTON -- A federal judge Monday blocked the proposed merger
of health insurers Aetna Inc. and Humana Inc. on antitrust grounds,
a potentially fatal legal blow to the $34 billion deal.
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.
Aetna and Humana didn't immediately respond to requests for
comment. Shares of the companies fell 2.2% and 2.4%, respectively,
in midday trading.
Aetna and Humana announced their planned merger in July 2015,
saying the deal would allow them to offer more cost-effective
products by combining their strengths and becoming more efficient.
Justice Department antitrust enforcers filed a lawsuit challenging
the transaction a year later. A trial took place last month.
The Aetna-Humana deal is one of two major health insurance
mergers being challenged by the Justice Department. The department
simultaneously sued to block the proposed combination of Anthem
Inc. and Cigna Corp. A trial in that case took place in the same
courthouse and a different judge, Amy Berman Jackson, is expected
to rule soon.
The lawsuits were among the last major law enforcement actions
taken by Obama administration antitrust officials.
Write to Brent Kendall at brent.kendall@wsj.com
(END) Dow Jones Newswires
January 23, 2017 12:13 ET (17:13 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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