Aetna Inc. ended its $37 billion takeover of Humana Inc., after deciding not to appeal a ruling by a federal judge who blocked the deal on antitrust grounds.
Aetna Chairman and CEO Mark Bertolini said in a company release Tuesday that "the current environment makes it too challenging to continue pursuing the transaction".
Aetna owes Humana a $1 billion payment as a result of the deal's collapse in what's known as a breakup fee.
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"Elderly patients were the big winners today as a federal court imposed an injunction on Aetna's $37 billion acquisition of Humana", AMA President Andrew W. Gurman said in a statement.
After the decision, Aetna announced it would consider appealing, but both companies appeared to be weighing their options over the last few weeks. He said that the merger of the two giants in healthcare would lower the competition available in the market of Medicare Advantage for seniors.
Signage is displayed at Aetna Inc. headquarters in Hartford, Connecticut, U.S., on Tuesday, Nov. 22, 2016. A federal judge in Washington agreed last week, saying the deal would violate antitrust law. A USA district judge ruled against Anthem, also on anticompetitive grounds.
Both companies would have combined to form the second-largest health insurer in the US.
Jackson ruled that the Department of Justice, eleven states and the District of Columbia had demonstrated "that the proposed combination is likely to have a substantial effect on competition in what is already a highly concentrated market". Anthem has vowed to appeal that decision.