Health insurers Aetna and Humana said on Tuesday that they would end their $34 billion merger agreement after a U.S. federal court ruled against the deal, saying it would stifle competition in the Medicare Advantage program.
Aetna and Humana (hum) announced their deal in July 2015, just a few weeks before Anthem Inc and Cigna Corp said they would also combine. The U.S. Justice Department sued to block both transactions last July and won in separate court proceedings.
Anthem filed an appeal last week after its loss, but Aetna and Humana had said they were weighing their next steps ahead of the Feb. 15 end date for the merger agreement.
“While we continue to believe that a combined company would create greater value for health care consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction,” said Aetna Chief Executive Officer Mark Bertolini.
Aetna, which had issued debt to acquire Humana, said it was redeeming the notes for cash.
Humana plans to hold a conference call later on Tuesday to provide its 2017 financial outlook. The company said the breakup fee was $630 million after taxes.