Hartford, Conn.-based Aetna's proposed $37 billion acquisition of Louisville, Ky.-based Humana faces major pushback from the U.S. Department of Justice, which reportedly voiced significant concerns about the deal.
An insider close to the situation but not authorized to speak publicly reported the DOJ's concerns to Reuters. The precise nature of the concerns was not specified, nor was it clear whether the unease is great enough to unwind the proposed transaction. Shares of Humana dropped 10 percent Thursday in light of the report.
The DOJ's concerns come as Aetna plans to divest a portfolio of its Medicare Advantage assets, valued around $1 billion, in hopes of soothing antitrust concerns. Last week the insurers extended their merger agreement from June 30 to Dec. 31.
So far the Aetna-Humana deal has gained approval in 17 out of 20 required states, with the Illinois Department of Illinois most recently approving. The California Department of Managed Health also approved it, while the Missouri Department of Insurance's preliminary order did not.
Representatives from Aetna are set to meet with members of the DOJ on Friday to discuss the acquisition. Individuals familiar with the matter said the insurer will meet with Assistant Attorney General for the Antitrust Division William Baer, JD, the department's No. 3. The high-profile meeting signals the merger review is in its final stages, Bloomberg reported.
The Aetna-Humana acquisition also raises questions regarding antitrust regulation. Regulators are concerned with whether the deal would limit the number of Medicare Advantage health plans available to the elderly, among other things.
The news comes in light of Connecticut Attorney General George Jepsen's comments regarding the $54 billion merger between Indianapois-based Anthem and Bloomfield, Conn.-based Cigna. The state AG's office has been investigating the merger and is expected to make a final decision in about two weeks.
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