Antitrust Jitters Surround Humana, Aetna Merger
Despite Aetna CEO's assurances that antitrust concerns would not stop the company's purchase of its smaller rival Humana, shares of Humana closed Monday 15.4 percent below the value of Aetna’s cash-and-stock offer, suggesting investors had worries. Aetna's stock also fell Monday.
The Wall Street Journal:
Deal-Related Jitters Hit Humana, Aetna
After weeks of banking on a takeover, Humana Inc.’s shareholders reacted coolly to news of the insurer’s $34.1 billion announced sale to Aetna Inc., amid concerns over the deal’s antitrust prospects, the possibility of an interloper and weakness in Humana’s own business. Shares of Humana closed Monday 15.4% below the value of Aetna’s cash-and-stock offer, a yawning gap that suggests investors worry the deal may face challenges. Some of the same concerns socked Aetna’s stock, which fell 6.4%. ... The largest unknown is antitrust approval, investors and analysts said. Aetna and Humana are the third- and fourth-biggest U.S. health insurers by revenue, and together would have about a million more Medicare subscribers than their next-closest competitor. (Hoffman and Wilde Mathews, 7/6)
The Washington Post:
More Competition Is Supposed To Help Consumers. That Might Not Be True With Health Insurance.
You may have heard the news over the weekend of a mega-merger between two of the country's biggest health insurance companies, Aetna and Humana. The $37 billion deal is just one of a series that are expected to reshape the health insurance landscape, after the Supreme Court decision last month made it clear that health care reform was here to stay. The question most people care about outside Wall Street -- what effect these mergers will have on what we pay for health care is a source of some disagareement among specialists. One of the most surprising -- and weird -- things about the insurer merger mania is that ultimately, some analysts think it might have benefits for consumers. But others say there is some evidence that a marketplace with fewer insurers will be bad for consumers. (Johnson, 7/6)
Aetna CEO Addresses Antitrust Concerns Over Humana Deal
Aetna Inc.'s chief executive said Monday he was confident any antitrust review of the health insurer's proposed purchase of smaller rival Humana Inc. would allow the deal to close in the second half of 2016. Mark Bertolini said Aetna had already prepared for possible divestitures to address overlaps with Humana's business in the largest-ever U.S. health insurance deal. The two sides announced the $37 billion transaction on Friday. Hospital and state officials said they would take a hard look at whether the deal would diminish competition for consumers. (Humer, 7/6)
Humana Cuts Outlook, Raising New Concerns About Aetna Deal
Humana Inc., fresh from announcing an agreement to be purchased by larger rival Aetna Inc., prompted new investor concerns about the $33 billion deal on Monday by lowering its 2015 financial forecasts. The transaction announced on Friday is already expected to face a tough review by U.S. antitrust regulators, particularly if another major deal among health insurers emerges. (Humer, 7/6)
And in other consolidations in the health care industry -
Emdeon Inc. Buying Altegra Health For $910M
Emdeon Inc. is in the process of buying Altegra Health, a data aggregation and analytics company, for about $910 million. Nashville-based Emdeon will combine Altegra with its existing Intelligent Healthcare Network, enabling the company to offer products to clients that help improve care quality and customer experience. (Pickert & Fletcher, 7/6)