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Aetna, Humana call off $34 billion deal

Aetna, Humana Mutually Terminate Merger Deal - Quick Facts

Health insurers Aetna Inc.

Cigna says it is rejecting Anthem's proposed $48 billion acquisition bid and suing the Blue Cross-Blue Shield insurer.

The companies are now free to make new deals or buy back billions of dollars of their own shares. The other deal - a combination of Anthem and Cigna - was also blocked by the Justice Department on antitrust grounds, and a different judge upheld that decision over the last few weeks.

Hartford health insurer Aetna said Tuesday morning that it is abandoning its proposed $37 billion merger with Humana, after the federal government recently blocked the deal citing antitrust concerns.

Additionally, Aetna said it has terminated its previously announced agreement to sell parts of its Medicare Advantage businesses to Molina Healthcare Inc.

Their deadline to complete the deal or agree to extend it while they appealed was February 15. Humana is also walking away a richer company. Humana will update its financial outlook for the coming year this afternoon.

"Anthem contracted for and assumed full responsibility to lead the federal and state regulatory approval process, as well as the litigation strategy, under the merger agreement", Cigna said in a press release.

Aetna said that in mid-March it will redeem for cash $10.2 billion of the remaining debt it had issued to acquire Humana.

Judges, clearly, agreed. One ruled against the Aetna/Humana deal in January, and a few weeks later that was chased by another judge blocking the Anthem/Cigna deal as well.

Cigna sued Anthem in DE court Tuesday for $15 billion in damages and termination fees as it seeks to pull the plug on the companies' planned $54 billion merger - but Anthem said its fellow health insurer couldn't legally drop the deal.

Analysts have speculated that Humana, which is strong in the Medicare Advantage business of selling private Medicare plans, could now be targeted in a future deal, by either Anthem or Cigna.