Aetna launches Medicare
Advantage asset sale: sources
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[July 02, 2016]
By Carl O'Donnell and Caroline Humer
(Reuters) - Aetna Inc has launched an
auction to sell a portfolio of Medicare Advantage assets as it seeks
antitrust approval for its $37 billion acquisition of U.S. health
insurance peer Humana Inc, according to people familiar with the matter.
The company is hoping the move will help ease antitrust concerns.
Merging Aetna's and Humana's Medicare Advantage businesses would
make the combined company the largest U.S. manager of the healthcare
insurance for seniors and the disabled.
Aetna has sent out pitchbooks to potential buyers and will begin
collecting bids as soon as next week, the people said on Friday. The
assets will likely be valued around the $1 billion range, the people
The sale process may take several months, and there is no certainty
that it will result in Aetna securing all the necessary regulatory
approvals for its deal with Humana, the people said.
The sources asked not to be identified because the sale process is
confidential. Aetna declined to comment, while Humana did not
respond to a request for comment.
In addition to the Aetna-Humana deal, the U.S. Department of Justice
has been scrutinizing Anthem Inc's acquisition of Cigna Corp,
announced less than a month after Aetna's deal last July.
The Department of Justice has been looking at the two deals closely,
in part because the move from five national insurers to three has
raised concerns among hospitals, doctors and consumers that it will
result in higher prices.
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A trader points up at a display on the floor of the New York Stock
Exchange August 20, 2012. REUTERS/Brendan McDermid
Wall Street has been less concerned about Aetna making it past antitrust
regulators. On Thursday, Leerink Partners analyst Ana Gupte said in a research
note that she believed there was an 80 percent chance of Aetna closing on its
acquisition of Humana, and noted that it was in dialogue with both the
Department of Justice and potential buyers for assets. She estimated that the
divestments would cover about 350,000 members.
(Reporting by Carl O'Donnell and Caroline Humer in New York; Editing by
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