A spokesman for Aetna stated that the agencies are ready to explain remedies with Missouri regulators, noting that the case won’t affect the pending federal regulatory process at the Department of Justice.
“This order doesn’t impede the DOJ approval procedure. We are disappointed with the Missouri order but open to have a constructive dialogue with the state to address their uncertainties,” stated T.J. Crawford, Aetna’s head of media relations.
Previous month, Aetna and Humana stated they had gained 15 of 20 essential state approvals, and the companies’ executives claim they still hope the deal to close in the second half of the year.
Elevation LLC analyst Ira Gorsky stated that while Missouri’s order presents an obstacle for the insurers, it amounts to conditional approval of the deal. He does not see an issue for the companies to discuss the needed state concessions.
“It is the 1st state approval to need the conditions,” stated Gorsky. “I consider this is normal in the course of the procedure, and anyone that has been following this closely should have expected divestitures.”
Gorsky points out thay Missouri is one of 3 states where Aetna and Humana would have a huge presence in the Medicare Advantage market as a combined company, along with Texas anFlorida. Florida insurance officials passed the merger previous February without any concessions; Texas regulators are yet reviewing the deal.
Anti-trust attorney David Balto hailed Missouri’s decision. Balto reflects the hospital, union and consumer groups opposed to both Aetna’s acquisition of Humana and Anthem’s $54 billion dollar deal to purchase Cigna, concerned that the mergers between 4 of the nation’s greatest insurer will result in less competition and higher costs.
“Missouri’s decision gives a concrete roadmap about how clients will lose if these mergers are passed,” Balto stated in a statement.
Investors have indicated concern over Anthem’s ability to secure DOJ approval for its acquisition of Cigna.
The firms have achieved approvals from various states, but some analysts worry the 2 firms will have difficulty convincing federal regulators that their deal won’t hurt competition in the huge employer market. On the day of Tuesday, Anthem CEO Joseph Swedish down played tensions between the firms.
“You would hope dynamic tension in terms of finally deciding what is best-of-breed — what parts do you keep, what do not you keep, who leads what,” Swedish said at the UBS Global Healthcare conference in New York.
His comments appear to have reassured investors, shares of Cigna rose more than 3.6% on the day of Wednesday, snapping a two-day losing streak. Anthem gained more than 1.9%.
Investors also seem to have shrugged off news of the Missouri order. Aetna and Humana rose about 2%.
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