Aetna Humana Merger Agreement

Insurers targeting their mergers had said the combinations would help them grow after the law changed everything from how doctors and hospitals are paid to the benefits insurers must provide. Cigna said in its public submission Tuesday that it had "informed Anthem that it has terminated the agreement and the merger plan." Cigna also said it filed a lawsuit against Anthem in a Delaware court to ensure Anthem can`t extend the date of its merger agreement. Anthem states that the termination date has already been extended to April 30, 2017. The deal is one of two mega-mergers proposed by the country`s largest health insurers. Both were challenged by the Obama administration. Another federal judge is expected to rule soon on the $48 billion case of Anthem and Cigna, the larger of the two deals. Anthem (ANTX) owes a $1.85 billion separation tax to Cigna (CI) under the terms of the contract. While the judge found that a merger between Aetna and Humana would not be in the interest of its consumers, companies should remain interested in future combinations. Insurers see mergers as a way to gain influence in negotiations with hospitals and doctors.

Monday`s verdict came six months after the Justice Ministry filed a lawsuit to block both the Aetna and Cigna deals. Both sides were deemed unlikely, although the merger between Cigna and Anthem was deemed even less likely, given that these two companies have more overlap at the national level and have not been able to present a united front. The two mergers were first proposed in 2015 and could have turned the U.S. health insurance landscape in two by consolidating the four largest insurers. Both of these transactions were blocked by the Justice Department on antitrust grounds and two different federal judges have upheld these decisions in recent weeks. "The court is not convinced that the efficiency gains generated by the merger will be sufficient to mitigate the anti-competitive effects for consumers in the contested markets," he wrote. Anthem spokeswoman Jill Becher said Cigna`s action was invalid and said the company had "no right to terminate the agreement." Judge says Aetna has left some Obamacare markets to win its merger battle If the deal disintegrates, Aetna Humana would have to pay $1 billion, in accordance with the terms of the merger agreement. Health insurer Cigna said Tuesday it would unilaterally denounce its merger deal with Anthem for $US 54 billion after the deal was blocked by a federal judge. The news came shortly after insurance giants Aetna and Humana announced a joint decision to abandon their $37 billion merger deal earlier in the day. Humana also announced that it would leave in 2018 all affordables care act exchanges where it sells individual insurance plans. .