Judge blocks Aetna-Humana megamerger

A federal judge on Monday blocked the proposed $34 billion merger of health insurance giants Aetna and Humana on antitrust grounds.

The Justice Department under the Obama administration sued to stop the deal. In his ruling, U.S. District Judge John Bates said the merger would threaten competition, writing that "federal regulation would likely be insufficient to prevent the merged firm from raising prices or reducing benefits" and there is "valuable head-to-head competition between Aetna and Humana which the merger would eliminate."

Aetna and Humana said that by 2018, they expected to see $1.25 billion in annual cost savings, but Bates wrote "the Court is unpersuaded that the efficiencies generated by the merger will be sufficient to mitigate the anti-competitive effect for consumers" in markets the deal affects, the Los Angeles Times reports. The Justice Department also sued to block Anthem's proposed $48 billion purchase of Sigma Corp on antitrust reasons; another judge is hearing that case.

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