The judge overseeing the USA government’s bid to stop health insurer Anthem Inc ANTM.N from buying Cigna Corp CI.N , who had been seen as favorable for the deal, has relinquished the case. “Ultimately, it will be fairer to the parties and better for the public if one of the cases is randomly reassigned to another judge in this district, who can give it prompt and full attention while this judge does the same with the other”.
Advertisement
Judge Bates will hear the U.S. Justice Department’s challenge to Aetna Inc’s purchase of Humana Inc.
Both companies told Bates in a hearing Thursday they need rulings by the end of the year because of the timelines outlined in their merger agreements. Humana jumped as much as 4.5 percent on the news and was up 3 percent to $179.36 at 11:14 a.m.in NY.
Bates, who was appointed by former President George W. Bush, didn’t set a trial date in his decision Friday.
Bates declined to say which case – Aetna’s or Anthem’s – he would submit for reassignment, but if it is Anthem’s, it could doom the deal. The judge had ruled against antitrust enforcers in 2004 when he allowed Arch Coal Inc ACIIQ.PK to buy Triton Coal.
Meanwhile, New York’s insurance regulator said it will hold a hearing to address its concerns about the Anthem-Cigna deal before approving the transaction, according to Bloomberg. “It does not matter to Anthem which judge is assigned to hear this case”.
Industry supporters believed Bates may lend a more favorable ear to the legal battle between the insurers and the US Department of Justice, which is attempting to block the multi-billion dollar mergers on the grounds of reduced competition and higher prices for consumers. Anthem’s planned purchase of Cigna is valued at $45 billion, while Aetna would pay about $33 billion for Humana.
Both deals were announced in July 2015.
The proposed mergers came as health insurers were contending with new costs and taxes from Obama’s national healthcare reform law, the Affordable Care Act.
Advertisement
Anthem told a federal judge on Thursday that its proposed merger with Cigna could fall apart if a USA lawsuit to stop the deal isn’t resolved quickly, Bloomberg reports. Aetna would be No. 3.
