DOJ Requests More Info on CVS/Aetna Mega-Merger

(Photo courtesy Wikimedia Commons user Michael Barera)

CVS’s proposed $69 billion acquisition of insurance giant Aetna isn’t yet a done deal.

The Department of Justice (DOJ), tasked with reviewing any merger of this scale, asked the 2 companies on Thursday to provide additional information about the deal. The request extends the waiting period by an additional 30 days, as mandated by the Hart Scott Rodino Act.

In a Securities and Exchange Commission filing yesterday, CVS acknowledged that both it and Aetna had received the second request and were “continuing to cooperate with the DOJ staff in its review of the transactions contemplated by the Merger Agreement.”

The deal sent ripples through the healthcare industry when it was announced in early December. Many interpreted it to be a distillation of healthcare’s trend toward consolidation. For CVS, it would continue a march that has seen it grow from simple retail pharmacy and convenience store to healthcare powerbroker, with in-store clinics and drug distribution to long-term care facilities.

When the deal was proposed, Aetna CEO Mark T. Bertolini said it would “[position] the combined company to dramatically further empower consumers.”

It is unknown how the DOJ under the Trump administration will treat the potentially game-changing healthcare deal. Perceived as being more business-friendly than the previous administration, it has challenged the telecom deal between AT&T and Time Warner on antitrust grounds, though that case is believed to be heavily politicized.

A year ago, Aetna and Humana cancelled a proposed merger after heavy scrutiny from the Obama DOJ. Cigna and Anthem had also planned to combine, but called the move off under similar circumstances. Both of those would have created horizontally-integrated insurance companies, as opposed to the seemingly vertical integration that CVS is attempting.

Shareholders for both CVS and Aetna are set to vote on whether they approve the deal on March 20^th.