A spokesman at Aetna Inc. says the insurance company is seriously considering an appeal after their deal to buy Humana Inc. in Louisville was blocked by a federal judge Monday.
Aetna in Connecticut is reviewing the opinion of John D. Bates, U.S. District Judge who heard the case. Humana says that they were also reviewing the judge’s decision but wouldn’t comment further.
Late Monday morning news broke that Bates was blocking the $37 billion deal between the insurance giants. Now, the $1 billion question, the amount Humana was to get if the deal was blocked, is what’s happening next.
Peter Costa, Wells Fargo analyst, believes the likelihood of getting an appeal under the new administration seems less likely.
However, it is not unlikely to see a potential restructuring of the deal in addition to an appeal.
Denying the deal may also be good for local employment. Efficiencies from the deal could have also resulted in job losses at Humana, which with about 12,500 local employees, is one of the area’s biggest employers.
The court agreed to an investigation conducted by the Justice Department, which they claim found that merger would result in a loss of competition between insurance providers in Medicare Advantage markets in 364 counties across 21 states.
Fernandez also says the court’s decision may be a bad sign for a merger of Cigna Corp. and Anthem Inc. two other insurance giants. That case, a $54 billion deal, will be the decision of a different federal judge.
Fernandez also said he sees this denial as a sign to Anthem-Cigna that their merger will not go through. If both did go through, the top three insurance companies would hold 32.43 percent of the market.