July 7, 2015 / 10:40 PM / 2 years ago

Humana, Aetna set termination fees for deal

(Reuters) - Health insurer Humana Inc and buyer Aetna Inc set fees to be paid in the event of a failure of the largest deal in the health insurance industry.

A trader points up at a display on the floor of the New York Stock Exchange August 20, 2012. REUTERS/Brendan McDermid

Aetna, which said last week it would buy Humana for about $37 billion in cash and stock, has to pay a termination fee of $1.69 billion, Humana said in a regulatory filing on Tuesday (1.usa.gov/1JSxWVr)

Humana would pay the larger rival $1.31 billion if the deal is terminated.

The deal faces antitrust issues as the authorities scrutinize how the combination will affect competition for each line of insurance: Medicare, Medicaid for the poor, individual insurance, commercial insurance for small and large businesses and the large employer business. (reut.rs/1LLQn1n)

Wall Street analysts and some antitrust experts have said that they expect the combination to be approved, although regulators may insist on some divestitures.

Aetna’s chief executive said on Monday that he was confident about an antitrust approval for the deal to close by June 30, 2016. The company had already prepared for possible divestitures to address overlaps with Humana’s business, he added.

Aetna is also required to pay Humana $1 billion if the deal is not closed by June 30, 2016, according to Tuesday’s filing.

Reporting by Rosmi Shaji in Bengaluru

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