Aetna Inc. and Humana Inc. say they have agreed to call off efforts to merge.
Hartford, Connecticut-based Aetna once hoped that acquiring Louisville, Kentucky-based Humana would be a good way to help both companies respond to pressure to cut costs in the face of regulatory uncertainty. But a federal court judge recently granted a U.S. Department of Justice request to block the $37 billion deal. The judge concluded that the deal would weaken competition in the Medicare Advantage market without saving consumers much money.
Mark Bertolini, Aetna's chairman, said in a statement that Aetna and Humana still believe the combined company would have created greater value for consumers, by making the combined company's coverage better and more affordable.
But "the current environment makes it too challenging to continue pursuing the transaction," Bertolini said.
Humana released a bare announcement of the breakup, without including any statement from its executives.
Humana has scheduled a conference call with investors on the deal termination for 4:45 p.m. Eastern time today. Companies usually post recordings of investor conference calls on their websites within a few hours after the calls end.
Aetna and Humana first announced the deal in July 2015.
Aetna acknowledged in its announcement that it owes Humana a $1 billion deal termination fee.
