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Humana shares drop on report of DOJ meeting on Aetna deal

Posted On: Jul. 7, 2016 12:00 AM CST

(Reuters) — Shares in health insurer Humana Inc. fell nearly 10 percent Thursday after a report that antitrust regulators were due to discuss "significant concerns" over its proposed buyout by rival Aetna Inc.

Antitrust trade publication MLex said officials from both insurers were due to meet with U.S. Department of Justice reviewers on Friday about their proposed merger. Justice Department investigators are mainly concerned whether the deal will limit consumer choices for Medicare Advantage health plans for the elderly.

Reuters previously reported that Aetna has begun a process to divest about $1 billion of Medicare Advantage assets to address antitrust concerns.

Humana was not immediately available for comment.

Aetna spokesman T.J. Crawford said the company continues to cooperate with the Justice Department.

Aetna announced plans to buy Humana, which specializes in Medicare Advantage, a year ago for about $34 billion.

The Justice Department is also reviewing Anthem Inc.'s proposed acquisition of Cigna Corp., and is weighing whether it will sue to block the deals.

Humana shares were trading at $166.17 in the early afternoon, down about 7.5 percent. Aetna shares fell less and were down $2.56, or 2.04 percent, at $117.77, widening the spread on the deal.

That spread, which represents the distance between Humana's share price and the value assigned by the merger terms, is now 35 percent, the widest it has been since the agreement was announced.