CVS-Aetna Deal May Hinge on Antitrust Approach Under Trump

Posted by Bloomberg

CVS-Aetna Deal May Hinge on Antitrust Approach Under Trump

By Robert Langreth, David McLaughlin & Zachary Tracer

CVS Health’s US$67.5 billion takeover of Aetna will test the Trump administration’s approach to far-reaching corporate takeovers, just weeks after the US government sued to block a major telecommunications merger.

The health-care deal unveiled Sunday would create an industry giant with over US$240 billion in annual sales with a hand in insurance, prescription drug plan administration, retail pharmacies and corner clinics. The companies said the combination will save US$750 million in costs and bring consumers better, more efficient health care.

In the past, deals combining companies up and down a chain of business — such as a supplier and a distributor — have been viewed as posing less anticompetitive risk than combinations of direct rivals. Last month, however, the Justice Department sued to block just such a “vertical” merger between AT&T and Time Warner, saying it would harm consumers and limit their media content options.

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