The chief executive officers of Aetna Inc. and Anthem Inc. are confident that their planned acquisitions of rivals Humana and Cigna, respectively, will go forward. Shareholders have approved the $54.2 billion and $47.5 billion transactions, and both are expected to close in the second half of the year.
Yet a closer look at how the Department of Justice is treating such megamergers suggests that the sailing may not be quite so smooth.
A recent report from law firm Gibson Dunn & Crutcher LLP reveals that antitrust enforcement is growing, with 2015 a “banner year for [Department of Justice] merger enforcement efforts.” In fact, antitrust enforcement agencies brought an average of 34 merger enforcement ations per year, increasing to 41 between 2010 and 2012.
Going forward, Gibson Dunn believes federal agencies will “continue to challenge transactions at a relatively high rate.”
While the Justice Department is still reviewing the Aetna-Humana and Anthem-Cigna mergers, it has set a precedent of objecting to high-profile merger proposals in other sectors. General Electric and AB Electrolux called off their deal in December, as did Tri-Union Seafoods and Bumble Bee Foods, after the Department objected to them on the basis of reduced competition.
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