CVS-Aetna deal may hinge on antitrust approach under Trump

Posted by Chicago Tribune

CVS-Aetna deal may hinge on antitrust approach under Trump

By Robert Langreth, David Mclaughlin & Zachary Tracer

CVS’ $67.5 billion takeover of Aetna will test the Trump administration’s approach to far-reaching corporate takeovers, just weeks after the US government sued to block a major telecommunications merger.

The health-care deal unveiled Sunday would create an industry giant with over $240 billion in annual sales with a hand in insurance, prescription drug plan administration, retail pharmacies and corner clinics. The companies said the combination will save $750 million in costs and bring consumers better, more efficient health care.

In the past, deals combining companies up and down a chain of business — such as a supplier and a distributor — have been viewed as posing less anticompetitive risk than combinations of direct rivals. Last month, however, the Justice Department sued to block just such a “vertical” merger between AT&T and Time Warner, saying it would harm consumers and limit their media content options.

“We are obviously going to get some scrutiny,” said Aetna Chief Executive Officer Mark Bertolini. “We are prepared to deal with whatever comes along to make this work.”

Aetna shares were trading at $184.84 at 6:33 a.m. in New York, well below CVS’ $207-a-share offer for the company — a sign investors are skeptical the deal will close at the current price.

How much scrutiny the deal gets from the government may depend on which federal agency reviews the takeover — the Justice Department, or the Federal Trade Commission.

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