Aetna and Humana have ended their merger effort, announcing Tuesday morning that they won’t appeal a federal court ruling blocking the $34 billion deal.
U.S. District Judge Robert Bates ruled last month that the combination of the two insurers would reduce competition in the private Medicare Advantage market for seniors.
Had the two insurance giants combined into one company, it would have been a major step toward further industry consolidation, which has worried consumer advocates. The Justice Department under the Obama administration had sought to block the merger.
Aetna owes Humana a $1 billion breakup fee. Aetna CEO Mark Bertolini said in a statement that he still believes the merger would create “greater value” for consumers but said it was too hard to pursue the effort.
“The current environment makes it too challenging to continue pursuing the transaction,” Bertolini said. “We are disappointed to take this course of action after 19 months of planning, but both companies need to move forward with their respective strategies in order to continue to meet member expectations.”
