Takeaways
- Today, Dec. 3, Judge Richard Leon held another hearing pursuant to the Tunney Act in the Aetna/CVS merger transaction.
- Judge Leon issued an order to show cause directing all parties to address why CVS and Aetna cannot hold their businesses separate pending further proceedings.
- Judge Leon expressed his preliminary concern as to whether the DOJ may have so narrowly drafted its complaint as to render the district court’s Tunney Act review ineffective.
- Judge Leon did not hear any arguments or otherwise allow the DOJ to address the court. He set another hearing for Dec. 18 at 3 PM ET for the parties to address his order to show cause.
Today, Dec. 3, Judge Richard Leon held another hearing pursuant to the Tunney Act in the Aetna/CVS merger transaction. The Tunney Act requires federal courts to review consent decrees in civil antitrust cases filed by the DOJ to ensure that the remedy proposed in the consent is in the public interest.
At today’s hearing, Judge Leon issued an order to show cause directing all parties, including the DOJ and the companies, to address why CVS and Aetna cannot hold their businesses separate pending further proceedings. In response to the DOJ’s status report filed over the weekend, Judge Leon commented that he “did not ask for that motion,” and “that’s what today’s hearing was for.”
Judge Leon also expressed his preliminary concern as to whether the DOJ may have so narrowly drafted its complaint as to render the district court’s Tunney Act review ineffective. He specifically noted the comments filed by the American Medical Association in opposition to the merger, and added that the divestiture of Aetna’s individual PDP business only addressed “less than 1% of the $69 billion acquisition.”
As Reorg M&A
reported, late yesterday, Dec. 2, the DOJ filed a status report before Judge Leon to update the court on the status of the settlement between the antitrust agency and the merging parties, CVS and Aetna. The DOJ alerted the court that CVS and Aetna consummated their merger on Nov. 28, two days after receiving approval from the last remaining state department of insurance. The DOJ argued that requiring CVS and Aetna to continue holding their post-divestiture assets separate was not necessary because the timely completion of Aetna’s individual PDP business to WellCare sufficiently remedied “the only part of Aetna’s business that had threatened the competitive harm alleged in the Complaint.”
Judge Leon did not hear any arguments or otherwise allow the DOJ to address the court. Instead, he set another hearing for Dec. 18 at 3 PM ET for the parties to address his order to show cause.
The judge did, however, grant the DOJ’s motion to appoint Julie Myers Wood as a monitoring trustee to oversee the divestiture process and to monitor the companies’ compliance with the proposed final judgment.
--Patrick Flavin