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Aetna will pay Humana a $1 billion breakup fee and has
terminated its plan to sell some Medicare Advantage assets to
Molina Healthcare Inc, the companies said.
Aetna and Humana announced their deal in July 2015, just a few
weeks before Anthem Inc and Cigna Corp said they would also
combine. The U.S. Justice Department sued to block both
transactions last July and won in separate court proceedings.
Anthem filed an appeal last week after its loss, but Aetna and
Humana had said they were weighing their next steps ahead of the
Feb. 15 end date for the merger agreement.
"While we continue to believe that a combined company would
create greater value for health care consumers through improved
affordability and quality, the current environment makes it too
challenging to continue pursuing the transaction,” said Aetna
Chief Executive Officer Mark Bertolini.
Aetna, which had issued debt to acquire Humana, said it was
redeeming the notes for cash.
Humana plans to hold a conference call later on Tuesday to
provide its 2017 financial outlook. The company said the breakup
fee was $630 million after taxes.
(Reporting by Caroline Humer in New York and Ankur Banerjee in
Bengaluru; Editing by Lisa Von Ahn)
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