The Wall Street Journal reported that government regulators are pushing back against Anthem’s (ANTM) purchase of Cigna (CI). California, however, seems to have few issues with the proposed combination of Aetna (AET) and Humana (HUM). Leerink’s Ana Gupte explains:
The Department of Managed Care (DMHC) has been reported to have approved the Aetna-Humana deal, according to a tweet from Chad Terhune of Kaiser Health News. While California is not a critical State for the deal given Humana’s small presence, it is another indication that the merger anti-trust review is on track with only four States remaining for approval. The news is also significant in light of the recent pushback Anthem is being reported to face from California’s Department of Insurance Commissioner David Jones. We would be looking to see if Anthem (OP) also receives approval for the Cigna (OP) deal from the DMHC which is an important catalyst given Anthem and Cigna have meaningful market share overlap in the state. We reiterate our 80+% probability of Aetna-Humana close and our OP rating on Aetna and Humana.
Shares of Aetna have gained 1.6% to $122.99 at 3:07 p.m., while Humana has risen 1.9% to $190.71, Anthem has advanced 0.7% to $133.29, and Cigna has dropped 1.2% to $128.00.