3 things to know about Aetna's price tag for failed Humana merger

Hartford, Conn.-based Aetna has shouldered several costs following the insurer's decision to scrap its $37 billion merger agreement with Louisville, Ky.-based Humana after a court ruled the deal anticompetitive in January.

Here are three things to know about Aetna's costs from the failed transaction.

1. Aetna paid Humana a $1 billion breakup fee on Feb. 16, as outlined in the companies' merger agreement, according to an annual report filed with the Securities and Exchange Commission.

2. As part of Aetna's attempt to reconcile the Justice Department's antitrust concerns, the insurer entered into an agreement with Long Beach, Calif.-based Molina Healthcare to divest certain Medicare Advantage assets. Aetna's deal with Molina was terminated Feb. 14 after the Aetna-Humana deal was called off.

As a result of the transaction's unsuccessful closure, Aetna paid Molina a $53 million termination fee on Feb. 16. Aetna also owes Molina 70 percent of applicable transaction costs. Aetna expects to pay Molina the remaining costs in the first quarter of 2017.

3. Additionally, Aetna borrowed $13 billion in bonds in 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. Including the premium, as well as losses on interest rate hedges and other transaction costs, Aetna lost an additional $420 million, the Hartford Courant reports. The insurer said it will recognize the loss in the first quarter of 2017.  

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