On Tuesday, Humana and Aetna put a stop to their merger.
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Multibillion dollar deals gone sour

By Lucinda Shen
February 14, 2017

After courting for a year and seven months, insurance companies Aetna and Humana axed their $35 billion merger plan Tuesday.

The two insurers, whose deal came under fire during the 2016 presidential elections, said that late in January, a federal judge had sided with the Department of Justice, blocking the proposed hookup. As a result Aetna and Humana agreed to call it quits on the deal, which would be valued at $34 billion based on Humana’s shares outstanding only.

Aetna is expected to pay Humana $1 billion pretax as a result of the breakup—not including the fees expected to go to lawyers and bankers for their services.

In honor of that costly divorce, here’s a list of companies in the last year that were prepared to form a massive partnership, only to break up.

The deals are ordered by their estimated cost, as calculated by Dealogic on the basis of their fully diluted shares and including debt.

6. KLA-Tencor and Lam Research: $11.5 billion

The two companies, both in the semiconductor industry, agreed to merge in October 2015. Roughly a year later, they called it quits when the Department of Justice opposed the deal on antitrust concerns. According to the DOJ, a combo would harm rival companies that build machines that put together computer chips.

5. Anbang Insurance and Starwood: $15.5 billion

At first, Chinese company Anbang was a mean opponent for Starwood’s other suitor, Marriott International and even won over Starwood by mid-March of last year. Sixteen days later, Anbang abruptly rescinded its offer, citing “market considerations.” Starwood and Marriott eventually agreed to merge in a $13.6 billion deal.

 

4. Aetna and Humana: $35 billion

“We plan to vigorously defend the Humana Acquisition,” Aetna wrote in an October filing with the Securities and Exchange Commission. That defense ended when a federal judge in Washington, D.C. said the merger does violate antitrust rules.

3. Halliburton and Baker Hughes: $38.7 billion

The two oil giants decided to join forces in November 2014. But then the DOJ sued to block the merger on antitrust concerns in April 2016, while European Union regulators were expected to raise objections as well. Halliburton agreed to pay a $3.5 billion breakup fee as a result.

2. Energy Transfer Equity and Williams: $55 billion

Energy Transfer Equity, an affiliate of Dakota Access Pipeline-builder Energy Transfer Partners, decided to walk away from its offer for Williams in June. The decision was made after ETE’s legal advisors couldn’t declare the deal tax-free. ETE wasn’t penalized for the breakup.

1. Pfizer and Allergan: $160 billion

Pfizer was ready to name Allergan’s headquarters in Ireland (where taxes are lower) as its new home base. But the Obama administration wasn’t too pleased with corporate inversions, so in April, the Treasury Department and the Internal Revenue Service unveiled regulations severely limiting the benefits of companies moving their headquarters abroad. That was the death knell for the merger. Pfizer paid a relatively tame $150 million for the breakup.

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