Humana, Aetna abandon $37B merger

  • Humana, Aetna abandon $37B merger

Humana, Aetna abandon $37B merger

Health insurer Cigna said Tuesday it filed suit against Anthem claiming billions of dollars in breakup fees and damages after a federal court blocked their proposed merger on antitrust concerns.

Health insurers Aetna Inc.

The companies scuttled the deal following U.S. District Court Judge John Bates ruled in January that the deal was "likely to substantially lessen competition" in certain markets for Medicare Advantage plans and Affordable Care Act options.

David Balto, an antitrust attorney in Washington, warned that even if the appeals court were to reverse Jackson's ruling and allow the deal to go through, the animosity between the two parties could be risky for the combined company. Hartford, Connecticut-based Aetna said it made a decision to quit the exchanges in 2017 purely for financial reasons, but Bates did not buy that argument.

While Aetna previously indicated it was "giving serious consideration to an appeal" to overturn Bates' ruling, Aetna-Humana are now accepting that "both companies need to move forward with their respective strategies in order to continue to meet member expectations", Aetna CEO Mark T. Bertolini said in a statement.

Cigna says it is rejecting Anthem's proposed $48 billion acquisition bid and suing the Blue Cross-Blue Shield insurer.

Daimler said it was investing a double-digit million euro amount into AutoGravity, a smartphone-based vehicle leasing and financing app as part of a broader push by the carmaker to build a digital platform for financial services.

It was in July 2015 that Aetna agreed to acquire Humana in $37 billion cash and stock deal.

Aetna announced it has called off a proposed deal to buy its rival Humana after a court blocked the merger on the grounds it would hurt competition in the health insurance market.

Anthem, which filed paperwork Monday to appeal the case, responded nearly immediately Tuesday by saying Cigna does not have the right to cancel the deal on its own. This stumped presiding Federal District Judge Amy Berman Jackson.