Hartford, Conn.-based Aetna has shouldered various costs following the insurer’s decision to scrap its $37 billion merger contract with Louisville, Ky.-based Humana after a court ruled the deal anticompetitive in the month of January. Here are main things to know over the Aetna price tag from the failed transaction.
- On Feb. 16, Aetna paid Humana a $1 billion breakup fee, as outlined in the merger agreement of companies, in accordance to an yearly report filed with the Securities and Exchange Commission.
- As part of the attempt of Aetna to reconcile the Justice Department’s antitrust uncertainties, the insurer entered into a contract with Long Beach, Calif.-based Molina Healthcare to divest few Medicare Advantage assets. The deal of Aetna with Molina was terminated on the day of Feb. 14 after the Aetna-Humana deal was called off.
As an outcome of the unsuccessful closure of transaction, Aetna paid Molina a $53 million termination fee on the day of Feb. 16. Aetna also owes Molina 70% of applicable transaction charges. Aetna hopes to pay Molina the remaining costs in the first quarter of 2017 year.
- Furthermore, Aetna borrowed $13 billion in bonds in the month of June 2016 to partially fund its purchase of Humana. Since the payer paid back the senior notes early, Aetna owes bond holders a $100 million redemption premium. Involving the premium, as well as losses on interest rate hedges and other transaction charges, Aetna lost an extra $420 million, the Hartford Courant reports. The insurer said it’ll identify the loss in the first quarter of 2017 year.
These were the main points about the Aetna price tag for failed Humana merger.
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