A US federal judge said that the trial on the Department of Justice’s (DOJ) challenge to block the proposed $37bn merger of Aetna and Humana will start on 5 December.
The trial will run for 13 days and a decision is expected to be taken in mid-January.
The US DOJ sued last month, arguing that the $37bn combination, in tandem with the proposed $54bn merger of rivals Cigna and Anthem would harm competition across the country, reducing the number of large, national health insurers from five to three.
The complaints allege that the two mergers would harm seniors, working families and individuals, employers and doctors as well as other healthcare providers by limiting price competition, reducing benefits and incentives to offer wellness programs and lowering the quality of care.
Judge John Bates of the US Court for the District of Columbia initially suggested a November 7 start date for the Aetna-Humana trial. The date is now pushed to December due to objections from the DOJ.
Bates told lawyers that he didn't see how the companies would get harmed by commencing the proceedings in December, instead of October, as requested by the insurers.
Aetna and Humana have time until the end of this year to close the transaction, as per the agreement, unless they both agree to extend it. As per the agreement, if the deal is not approved by then, Humana has an option to cancel it and claim $1bn as breakup fee.
The cash and stock deal was announced on 3rd July 2015, wherein Aetna agreed to offer $230 per Humana share based on the closing price of Aetna common shares on July 2, 2015.
If approved, the combination brings together Humana’s Medicare Advantage business with Aetna’s portfolio and commercial capabilities to create a company to serve the most seniors in the Medicare Advantage program.
The combined company will offer a range of affordable, consumer-centric health care products, for improving health outcomes, and promote wellness.
Both the companies have earlier announced that the combination will offer $1.25bn in annual synergies from 2018 as well as add over 14 million members, including 3.2 million Medicare Advantage members.
Image: Aetna and Humana have time until the end of this year to close the transaction. Photo: courtesy of stockimages at FreeDigitalPhotos.net.