Department of Justice won’t challenge CVS-Aetna merger: report

DOJ, stay away from our doors! The $69 bn CVS Health and Aetna mega-merger looks like it will go sailing down that river, if Mr. Market is right. Shares in both companies enjoyed a nice bump on today’s report that the DOJ won’t challenge this merger. The local Hartford Courant is relieved that Aetna plans to stay in their longtime HQ city (since 1853), conveniently omitting their long-standing plan to set up a big shop in NYC. CNBC

What a difference from a year ago when two mega-mega-mergers, Aetna-Humana and Anthem-Cigna, were shot d0wn–nay, riddled with bullets–in the Senate and in two courts [TTA 9 Feb 17]. Cigna is still living with the hangover of their bad breakup with Anthem, with a fight over a nearly $1.9 bn breakup fee [TTA 17 May 17] continuing in the Delaware Chancery Court in 2019.  Cigna nixed any other insurers in a horizontal merger and sought out Express Scripts, a pharmacy benefits manager (PBM) which was reeling a bit after its largest client (coincidentally) Anthem departed. Anthem sued its PBM, Express Scripts, for $15 billion, alleging the PBM overcharged it by $3 billion annually The merger will cost them over $550 million in transaction cost and that is just the beginning. That $1.9 bn would sure come in handy. Modern Healthcare 

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