Aetna CEO addresses antitrust concerns over Humana deal
By Caroline Humer
NEW YORK (Reuters) - Aetna Inc's (AET.N: Quote) chief executive said Monday he was confident any antitrust review of the health insurer's proposed purchase of smaller rival Humana Inc (HUM.N: Quote) would allow the deal to close in the second half of 2016.
Mark Bertolini said Aetna had already prepared for possible divestitures to address overlaps with Humana's business in the largest-ever U.S. health insurance deal. The two sides announced the $37 billion transaction on Friday. Hospital and state officials said they would take a hard look at whether the deal would diminish competition for consumers.
"We took a conservative view of what we would need to divest," Bertolini said during an investor conference call.
Aetna has not discussed the deal directly with the U.S. Department of Justice, but has consulted with regulatory experts, Bertolini told cable channel CNBC.
"We believe that given the legal advice we have...that this is a very manageable transaction," he said.
The bigger the insurer, the more power it has negotiating prices with hospitals and other providers, as well as improving its doctor networks.
Aetna and Humana are in nine of the same states in one of their key businesses - Medicare Advantage plans for the elderly. Combined, they would have market share of 88 percent in Kansas, 80 percent in West Virginia, 58 percent in Iowa and 51 percent in Missouri.
Regulators would also look for the impact on competition in each local market for the companies' Medicaid plans for the poor, individual insurance, commercial insurance for small and large businesses and the large employer business. Continued...