The Department of Justice is seeking more information—and thus will get more time—to review the multibillion-dollar deal between CVS and Aetna.
Federal regulators sent CVS and Aetna the request for additional information about their transaction just before the 30-day waiting period—mandated by the Hart Scott Rodino Act—was set to expire on Thursday, according to a Securities and Exchange Commission filing. The move triggers another 30-day waiting period, during which the DOJ will continue to review the deal.
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“CVS Health and Aetna have been cooperating with the DOJ staff since shortly after the announcement of the merger agreement and are continuing to cooperate with the DOJ staff in its review of the transactions contemplated by the merger agreement,” the firms said in their filing with the SEC.
The DOJ’s request for more information, while not unsurprising for a deal of this size, shows it is carefully scrutinizing CVS’ bid to purchase Aetna. The transaction is valued at $69 billion, or $77 billion with the assumption of Aetna’s debt.
So far, it is anyone’s guess whether federal regulators will approve the deal—a potential game-changer for the already dynamic healthcare industry.
One might expect the Trump administration’s DOJ to be more lenient than regulators in the Obama administration—who blocked the Anthem-Cigna and Aetna-Humana deals—as Republicans are typically more business-friendly. On the other hand, the DOJ’s decision to block the AT&T-Time Warner deal may indicate that regulators in the current administration may take a tough line against mergers that would control a large portion of a supply chain.
Meanwhile, CVS and Aetna have each scheduled a meeting for March 20 in which their respective shareholders will vote on whether to approve the deal. One of Aetna’s shareholders has already come out against it, filing a lawsuit that alleges the transaction undervalues the insurance company and thus shortchanges those who own its stock