Hartford, Conn.-based Aetna and Louisville, Ky.-based Humana mutually terminated their $37 billion merger agreement following a U.S. District Court's decision to block the proposed deal over antitrust concerns.
Here are four things to know.
1. Aetna will pay Humana a $1 billion breakup fee, or roughly $630 million post-taxes, according to Bloomberg.
2. Aetna ended its agreement to sell certain Medicare Advantage assets to Long Beach, Calif.-based Molina Healthcare. During the antitrust trial, a federal judge rejected the divesture as a solution to the Justice Department's concerns. The insurer will pay all applicable fees associated with terminating the agreement.
3. In a statement Tuesday, Aetna Chairman and CEO Mark Bertolini wrote, "While we continue to believe that a combined company would create greater value for healthcare consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction … both companies need to move forward with their respective strategies."
4. Humana spokesperson Tom Noland told Bloomberg the insurer is "fully prepared to go forward as an independent company." The insurer will provide its 2017 outlook at 4:15 p.m. and hold a call with investors afterward.