Health insurance deals near approvals

(Bloomberg) -- Two major health-care deals that stand to reshape the insurance and pharmacy industries are moving toward winning antitrust approval, according to a person familiar with the matter, a final step as the takeovers head toward completion.

The U.S. Department of Justice is on track to soon approve the acquisition of pharmacy-benefit manager Express Scripts Holding Co. by health insurer Cigna Corp., as well as CVS Health Corp.’s takeover of insurer Aetna Inc., said the person, who asked not to be identified because the process is private.

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Signage is displayed at Aetna Inc. headquarters in Hartford, Connecticut, U.S., on Tuesday, Nov. 22, 2016. The Justice Department sued to block the union of Aetna Inc. and Humana Inc., saying they would reduce the number of large, national health care insurance providers, leading to increased costs for their clients. Photographer: Michael Nagle/Bloomberg

CVS and Aetna are in talks with the Justice Department about divesting Medicare prescription drug plans to resolve the government’s concerns the deal will otherwise harm competition. The Cigna-Express Scripts deal may not require any divestitures, said the person.

“We continue to constructively work with the Department of Justice and remain confident the deal will close by the end of the year,” said Brian Henry, a spokesman for Express Scripts.

Representatives for the Justice Department, CVS and Aetna declined to comment. A Cigna spokesman didn’t return requests for comment.

Aetna shares were up 1.3 percent to $201.93 at the close in New York Wednesday, while CVS gained 1.2 percent to $74.89. Express Scripts rose 3.3 percent to $89.83, and Cigna fell 0.6 percent to $184.93.

CVS announced its $68 billion deal for Aetna late last year. The deal would combine CVS’s drugstores and pharmacy-benefits management unit with the third-biggest U.S. health insurer. Cigna announced its $54 billion deal for Express Scripts in March.

Both deals are vertical transactions, meaning they join companies that operate at different levels of the supply chain. Bloomberg reported in August that antitrust regulators didn’t find vertical-competition concerns in evaluating the CVS-Aetna deal.

The Wall Street Journal reported on the approval process earlier Wednesday.

Bloomberg News