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Aetna and Humana Mutually End Merger Agreement

February 14, 2017 | Company News

HARTFORD, Conn. – Aetna (NYSE: AET) and Humana (NYSE: HUM) have mutually ended their merger agreement following a ruling from the United States District Court for the District of Columbia granting a United States Department of Justice request to enjoin the merger.

“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.”

Aetna will pay Humana $1 billion as a result of the termination of the merger agreement. Additionally, Aetna has terminated its previously announced agreement to sell certain Medicare Advantage assets to Molina Healthcare, Inc. (NYSE: MOH) and will pay the applicable fees associated with that termination.

“On behalf of Aetna, I would like to thank everyone involved in the transaction for their commitment to improving how health care is delivered,” Bertolini concluded.

Aetna Announces Full Redemption of Special Mandatory Redemption Notes

In related news, Aetna announced today that it will redeem for cash on or about March 16, 2017:

  • The entire $1.650 billion aggregate principal amount outstanding of its 1.900% Senior Notes due June 7, 2019 (CUSIP 00817 AT5);

  • The entire $1.850 billion aggregate principal amount outstanding of its 2.400% Senior Notes due June 15, 2021 (CUSIP 00817 AU2);

  • The entire $2.800 billion aggregate principal amount outstanding of its 3.200% Senior Notes due June 15, 2026 (CUSIP 00817 AW8);

  • The entire $1.500 billion aggregate principal amount outstanding of its 4.250% Senior Notes due June 15, 2036 (CUSIP 00817 AY4); and

  • The entire $2.400 billion aggregate principal amount outstanding of its 4.375% Senior Notes due June 15, 2046 (CUSIP 00817 AX6).

The notes to be redeemed (collectively, the “Special Mandatory Redemption Notes”) were issued in June 2016. The Special Mandatory Redemption Notes will be redeemed at a special mandatory redemption price of 101% of the aggregate principal amount of the Special Mandatory Redemption Notes, plus any interest accrued and unpaid to, but excluding, the special mandatory redemption date. Payment of the special mandatory redemption price will be made on or about March 16, 2017. Aetna expects to fund the redemption with the proceeds of its senior notes issued in June 2016.

A notice of special mandatory redemption is being sent to all currently registered holders of the Special Mandatory Redemption Notes by the trustee, U.S. Bank National Association. Copies of the notice of special mandatory redemption and additional information relating to the procedure for redemption may be obtained from U.S. Bank National Association by calling 1-800-934-6802.

About Aetna

Aetna is one of the nation’s leading diversified health care benefits companies, serving an estimated 46.7 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, and medical management capabilities, Medicaid health care management services, workers’ compensation administrative services and health information technology products and services. Aetna’s customers include employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers, governmental units, government-sponsored plans, labor groups and expatriates. For more information, see

Cautionary Statement Regarding Forward-Looking Statements; Additional Information

Certain information in this press release is forward-looking, including our expectations as to the timing and funding of the redemption of the Special Mandatory Redemption Notes. Forward-looking information is based on management’s estimates, assumptions and projections and is subject to significant uncertainties and other factors, many of which are beyond our control. Important risk factors could cause actual future results and other future events to differ materially from those currently estimated by management, including, but not limited to, changes in our future cash requirements, capital requirements, results of operations, financial condition and/or cash flows. For more discussion of important risk factors that may materially affect Aetna, please see the risk factors contained in Aetna’s 2015 Annual Report on Form 10-K (“Aetna’s 2015 Annual Report”) and Aetna’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (“Aetna’s Quarterly Report”), each on file with the Securities and Exchange Commission (the “SEC”). You also should read Aetna’s 2015 Annual Report and Aetna’s Quarterly Report, for a discussion of Aetna’s historical results of operations and financial condition.

Aetna Media Contact:

T.J. Crawford

Investor Contact:

Joe Krocheski