Anthem does not plan to make divestitures in deal to acquire Cigna

Though divestitures are common in large-scale acquisitions, Anthem does not expect to have to make any as it closes its merger with Cigna, according to a newly released piece from Policy and Regulatory Report (PaRR).

In an interview after a recent Senate hearing on the Anthem-Cigna and Aetna-Humana mergers, Anthem CEO Joseph Swedish told PaRR that the company has not made a divestiture proposal to the Department of Justice (DOJ) and that "we're not expecting divestitures."

The major competitive issue with the Anthem-Cigna deal concerns Anthem's ownership of Blue Cross Blue Shield plans in 14 states. Swedish said during the Senate hearing that in states where Anthem does operate a Blues plan, the Cigna brand may be absorbed into Anthem's portfolio, but will continue to compete with Blues plans in the national account market.

Aetna and Humana, meanwhile, are expected to have to make divestitures if their merger is approved, which some predict will leave the Medicare Advantage market an attractive space in which to invest.

In fact, hospital systems themselves may be suitable buyers for such divestitures, Aetna CEO Mark Bertolini told PaRR, but he said that it's too soon to evaluate whether any such divestitures would past regulatory approval.

Bertolini also said that the company's decision to refile antitrust review paperwork Aug. 19 was not a negative sign but simply a way of giving the DOJ more time to consider the deal.

Both Swedish and Bertolini have defended the merits of their deals before Congress, most recently in a House Judiciary Committee hearing in which representatives from the American Hospital Association and American Medical Association criticized the mergers.

To learn more:
- here's the report

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