Obama admin may sue to block health mergers
The Obama administration is preparing lawsuits seeking to block two mega health care mergers, potentially scrambling the insurance industry's plans for swift consolidation, according to a government official who has been briefed on the matter.
The Justice Department is weighing court action against Anthem's $48 billion acquisition of Cigna and Aetna's $37 billion acquisition of Humana, said the official, who is not authorized to speak publicly about the government's approach.
Any effort to form a blockade against the two insurance mergers would mark the latest in a series of actions by the Justice Department's antitrust division to halt what it perceives as anti-competitive trends in the private sector. Government officials are said to be concerned about the effect of the mergers on consumers.
In the event of a lawsuit, a federal judge would decide whether the mergers must be killed under antitrust provisions — and although there's no guarantee the Justice Department will prevail, corporations often choose to give up instead of waging an uncertain, lengthy and costly fight against the government.
The division has already successfully pursued the demise of oilfield services giant Halliburton's acquisition of Baker Hughes and retail and supplies company Staples' purchase of Office Depot. The Obama administration also scuttled Pfizer's proposed tax-inversion deal in a reverse merger with drug firm Allergan.
Obama administration takes aim at corporate mergers, inversions
Waging a fight against the insurance deals would also reflect another concrete mark left by the Obama administration on the contours of an industry that has already been dramatically reshaped by the president's sweeping health care overhaul.
Bill Baer, then serving as antitrust chief, said in April that corporate leaders have shown too much "enthusiasm" for deals with "all that capital coming back into the marketplace."
A Justice Department spokesman was not immediately available for comment Tuesday.
Aetna spokesman T.J. Crawford said, "We don't comment on rumors or speculation, but we're steadfast in our belief that this deal is good for consumers and the health care system as a whole."
Shares of Anthem (ANTM) fell 2.2% to close at $132.06, while shares of Cigna (CI) fell 2.8% to $130.30. Aetna's stock (AET) fell 2.7% to $115.15, while Humana's stock (HUM) fell 3.9% to $153.38.
Spokespeople for Anthem and Cigna declined to comment Tuesday. A spokesperson for Humana did not immediately respond.
Hurdles mount for Anthem-Cigna merger
There were already signs that Anthem's acquisition of Cigna was in trouble. California's insurance commissioner urged the DOJ to oppose both deals.
Anthem in June acknowledged "ongoing dialogue with the Department of Justice and state regulators regarding the compelling combination of our two companies to increase consumer access to high-quality, affordable health care."
Contributing: Kevin McCoy
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.