Two major health insurance deals that would reshape the industry's landscape -- Anthem Inc.'s purchase of Cigna Corp. and Aetna Inc.'s deal to acquire Humana Inc. -- appear to be in trouble amid concerns they would reduce competition. The Justice Department, which has been reviewing both transactions, is preparing lawsuits to block them, Bloomberg News and the Wall Street Journal reported Tuesday. A decision whether to file the suits could come as early as this week, and the companies could fight in court or agree to settle, the reports said. A Justice Department spokesman declined to comment. Shares of the four companies fell 2% to 4% on Tuesday.
NEW YORK/FRANKFURT – German drugs and chemicals group Bayer AG made an unsolicited takeover offer for U.S. seeds company Monsanto Co, aiming to create the world's biggest agricultural supplier and integrate pesticides and seeds markets. Monsanto disclosed the approach on Wednesday before Bayer confirmed its move, though neither gave the proposed terms. Sources said Bayer would pay Monsanto shareholders with cash and stock, though the offer price could not be learned. Bernstein Research analyst Jeremy Redenius estimated the price at 41.9 billion ( 47 billion), plus 6.7 billion in assumed debt. He said Bayer might need a 27 billion share issue to help to fund the purchase.
Valeant Pharmaceuticals International Inc. received a takeover approach this spring from Takeda Pharmaceutical Co. and investment firm TPG, which it rejected, according to the Wall Street Journal. The specialty drugmaker has been struggling to revive itself after its business model and drug pricing practices came under scrutiny, and it recently brought in a new chief executive officer, Joseph Papa. The Takeda-TPG approach was made before Papa's appointment, and there are no talks underway currently, the Wall Street Journal reported late Thursday. Papa said Monday at the UBS Global Healthcare Conference that Valeant has a "very good pipeline" of new drugs that hasn't been fully appreciated, and he acknowledged that there are still "speed bumps" to work through in dermatology. The board is giving Papa time to set a new course for the Laval, Quebec-based drugmaker, the Journal said.
Shelley Rouillard, director of the California Department of Managed Health Care, announced her decision Monday. As a condition of the approval, Aetna agreed to limit premium increases in the small group market and to allow greater state oversight of its rates. The company will also have to keep certain decision-making functions in California and must invest in various health initiatives. The proposed 35-billion cash-and-stock deal would make Hartford, Conn.-based Aetna a sizable player in the rapidly growing Medicare Advantage business, which offers privately run versions of the federally funded healthcare program for the elderly and some people with disabilities. The merger still requires approval by the U.S. Department of Justice.
The Obama administration went to court Thursday to block two major health insurance mergers, siding with consumer advocates and medical groups worried that the consolidation of large national health plans could lead to higher premiums. The long-anticipated move by the Justice Department and attorneys general in 10 other states, including California, will at least temporarily prevent Anthem Inc.'s purchase of Cigna Corp., a combination that would have created the nation's largest health insurer. And it will stop Aetna Inc.'s bid to acquire Humana Inc., a merger that would have combined the nation's third and fifth biggest health plans. "Competitive insurance markets are essential to providing Americans the affordable and high-quality healthcare they deserve," Atty. Gen. Loretta E. Lynch said Thursday after the suits were filed in federal district court in Washington.