Aetna, Humana Call Off Merger; Both Companies Said To 'Move Forward With Their Respective Strategies'

The mega-merger between Aetna Inc (NYSE: AET) and Humana Inc (NYSE: HUM) was officially called off Tuesday morning, although this shouldn't come as a surprise after a ruling from the U.S. District Court for the District of Columbia declined the transaction.

A joint press release from the two companies confirmed that Aetna will pay Humana $1 billion as part of the original merger agreements, which called for the payment if the deal is not approved.

Related Link: Reuters Article Highlights Cigna, Humana Might Still Combine Despite Anti-Trust Rulings

Aetna has also terminated its previously announced agreement to sell certain Medicare Advantage assets to Molina Healthcare. It will pay the applicable fees associated with the termination.

"While we continue to believe that a combined company would create greater value for health care consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction," said Aetna chairman and CEO Mark T. Bertolini. "We are disappointed to take this course of action after 19 months of planning, but both companies need to move forward with their respective strategies in order to continue to meet member expectations. Our mutual respect for our companies' capabilities has grown throughout this process, and we remain committed to a shared goal of helping drive the shift to a consumer-centric health care system."