1 00:00:03,200 --> 00:00:06,600 Speaker 1: Global business news twenty four hours a day. If Bloomberg 2 00:00:06,640 --> 00:00:09,720 Speaker 1: dot Com, the Radio plus mobile last and on your radio. 3 00:00:10,000 --> 00:00:14,200 Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters. 4 00:00:14,240 --> 00:00:17,479 Speaker 1: I'm Charlie Pellett. The Dallas higher, SMP and NESTAK lower. 5 00:00:17,560 --> 00:00:20,279 Speaker 1: This update brought to you by t to Computing, a 6 00:00:20,320 --> 00:00:24,160 Speaker 1: new kind of I T solutions company for workflow, mobility 7 00:00:24,200 --> 00:00:27,680 Speaker 1: and infrastructure. Let them explain how their expertise can help 8 00:00:27,720 --> 00:00:32,120 Speaker 1: you gain greater business value. Visit t to computing dot 9 00:00:32,200 --> 00:00:34,920 Speaker 1: com for more information. Now let's head right over to 10 00:00:34,960 --> 00:00:37,760 Speaker 1: the first Word Breaking news desk for today's afternoon call, 11 00:00:38,000 --> 00:00:42,280 Speaker 1: and here is Bill Maloney. Good afternoon, Charlie. Quiet day 12 00:00:42,320 --> 00:00:44,760 Speaker 1: for the Dow in SMP, with the Dow currently higher 13 00:00:44,800 --> 00:00:48,280 Speaker 1: by nine points, STPs down five will, the NASDAK drops 14 00:00:48,320 --> 00:00:50,960 Speaker 1: twenty two, the small cap six hundred is lower by 15 00:00:51,000 --> 00:00:53,600 Speaker 1: four points, and the US ten yield at one point. 16 00:00:55,240 --> 00:00:58,480 Speaker 1: All tennis sectors are lower, led by losses in materials, 17 00:00:58,600 --> 00:01:02,520 Speaker 1: energy and telecom down, Transports drop twenty as a biotech 18 00:01:02,720 --> 00:01:05,520 Speaker 1: Sinc Thirty nine, and the VIX is higher by one 19 00:01:05,560 --> 00:01:09,280 Speaker 1: point five percent. Down leaders included Mike McDonald's J and 20 00:01:09,400 --> 00:01:13,680 Speaker 1: J and Boeing, Microsoft, and Goldman Sachs led to the downside. 21 00:01:14,200 --> 00:01:18,440 Speaker 1: Netflix plunged fourteen percent after earnings, Philip Moore sank three 22 00:01:18,480 --> 00:01:21,360 Speaker 1: percent after reporting, while vm Ware jumped as much as 23 00:01:21,400 --> 00:01:24,760 Speaker 1: ten point eight percent following its results. Some of the 24 00:01:24,800 --> 00:01:27,080 Speaker 1: names pointing after the Belts and I included Intuitive Surgical, 25 00:01:27,160 --> 00:01:32,120 Speaker 1: Marvel Technology, Microsoft, and United Continental as emits for Microsoftware 26 00:01:32,160 --> 00:01:35,120 Speaker 1: for fifty eight cents on revenues of twenty two point 27 00:01:35,160 --> 00:01:37,959 Speaker 1: one three billion. Live in the first breaking news desk 28 00:01:38,040 --> 00:01:39,880 Speaker 1: on Bill Maloney, Charlie all right, thank you very much, 29 00:01:39,880 --> 00:01:42,680 Speaker 1: Bill Maloney in to hear live breaking news over your 30 00:01:42,680 --> 00:01:47,200 Speaker 1: Bloomberg Times Squawk squ a w K on your terminal. 31 00:01:47,640 --> 00:01:52,400 Speaker 1: I'm Charlie Peloton. That's a Bloomberg business flash you're listening 32 00:01:52,400 --> 00:01:55,400 Speaker 1: to taking start with Kathleen Names and Pim Fox on 33 00:01:55,440 --> 00:02:00,400 Speaker 1: Bloomberg Radio. The shares of ETNA are down nearly three 34 00:02:00,480 --> 00:02:04,800 Speaker 1: percent today, Anthem shares down two percent, a Signa Corpet 35 00:02:04,800 --> 00:02:08,600 Speaker 1: down two percent, Humanity down three and three quarters of 36 00:02:08,639 --> 00:02:12,400 Speaker 1: a percent. Why while the Justice Department close to challenging 37 00:02:12,480 --> 00:02:18,080 Speaker 1: Anthems proposed acquisition of Signa and Etness plan combination with Humanity, 38 00:02:18,120 --> 00:02:20,560 Speaker 1: This took all according to people familiar with the matter. 39 00:02:20,919 --> 00:02:25,760 Speaker 1: Here to tell us more, Jennifer relitigation analyst Bloomberg Intelligence. 40 00:02:25,840 --> 00:02:30,040 Speaker 1: Bloomberg Intelligence provides unique real time research and context on 41 00:02:30,080 --> 00:02:32,840 Speaker 1: a variety of industries, as well as all market and 42 00:02:32,960 --> 00:02:36,880 Speaker 1: government factors that affect businesses. Our terminal customers can access 43 00:02:36,919 --> 00:02:41,520 Speaker 1: this function at b I go. Jennifer, thanks for coming in. 44 00:02:41,600 --> 00:02:44,240 Speaker 1: Appreciate it all, right, so tell us maybe give us 45 00:02:44,280 --> 00:02:46,640 Speaker 1: an update about what has been going on. It's been 46 00:02:46,639 --> 00:02:49,200 Speaker 1: going on for a long time. I think more than 47 00:02:49,240 --> 00:02:51,800 Speaker 1: a year, right, Well, first, thanks for having me really 48 00:02:51,800 --> 00:02:54,600 Speaker 1: appreciate it. Um, this has been going on for more 49 00:02:54,639 --> 00:02:56,919 Speaker 1: than a year as a matter of fact. Second, request 50 00:02:56,960 --> 00:02:59,280 Speaker 1: for information, which are really just the in depth sort 51 00:02:59,320 --> 00:03:02,480 Speaker 1: of subpoena that the d o J issues to parties 52 00:03:02,520 --> 00:03:05,240 Speaker 1: to investigate deals, were issued to both of these in 53 00:03:05,320 --> 00:03:08,040 Speaker 1: both of these murders last July. So we're talking about 54 00:03:08,040 --> 00:03:12,040 Speaker 1: a full year investigation. But nowadays that's not unusual for 55 00:03:12,160 --> 00:03:15,480 Speaker 1: big complex mergers that are likely going to need remedies 56 00:03:15,680 --> 00:03:18,320 Speaker 1: or actually be problematic, which it is beginning to look 57 00:03:18,360 --> 00:03:21,639 Speaker 1: like these will be. Use the word remedy and I 58 00:03:21,760 --> 00:03:25,400 Speaker 1: want to maybe you can define what that what that describes. 59 00:03:26,040 --> 00:03:30,040 Speaker 1: So essentially, when the DJ or the FTC investigates a 60 00:03:30,080 --> 00:03:33,320 Speaker 1: deal and they think Trade Commission, Federal Trade Commission, yes, 61 00:03:33,360 --> 00:03:36,320 Speaker 1: sorry about that, And they think that some aspect of 62 00:03:36,320 --> 00:03:40,840 Speaker 1: a merger could have a bad effect, could cause a 63 00:03:40,920 --> 00:03:45,080 Speaker 1: lack of innovation or increased prices, they first look to 64 00:03:45,120 --> 00:03:47,800 Speaker 1: see whether there's something that can be done, some piece 65 00:03:47,880 --> 00:03:49,680 Speaker 1: of one of the businesses, let's say, that can be 66 00:03:49,720 --> 00:03:53,080 Speaker 1: sold off to another competitor to replace the competition that 67 00:03:53,120 --> 00:03:55,960 Speaker 1: would be lost by virtue of the merger. If that 68 00:03:56,040 --> 00:03:57,800 Speaker 1: can be done, and it can be done to their 69 00:03:58,200 --> 00:04:02,800 Speaker 1: the regulators satisfaction, then the larger deal, the underlying deal 70 00:04:02,840 --> 00:04:05,480 Speaker 1: can usually go ahead and some small piece of business 71 00:04:05,520 --> 00:04:08,480 Speaker 1: is sold off and that's usually called a remedy. It's 72 00:04:08,480 --> 00:04:11,080 Speaker 1: fixing whatever the problem is. So I have none of 73 00:04:11,120 --> 00:04:13,760 Speaker 1: the company has been able to fix the problem. Is 74 00:04:13,800 --> 00:04:16,840 Speaker 1: this what is at stake? Well, it looks like that's 75 00:04:16,880 --> 00:04:20,039 Speaker 1: the direction this is going in. We we have heard 76 00:04:20,080 --> 00:04:23,279 Speaker 1: a lot about Etna and Humanita trying to fix the 77 00:04:23,400 --> 00:04:27,600 Speaker 1: issues that they may have in an overlap in medicare advantage. 78 00:04:28,000 --> 00:04:30,560 Speaker 1: They do, they do. They are both active in that 79 00:04:30,680 --> 00:04:34,560 Speaker 1: area which is looked at locally by the Department of Justice, 80 00:04:34,839 --> 00:04:36,680 Speaker 1: and a lot of us thought that there may be 81 00:04:36,760 --> 00:04:39,240 Speaker 1: a way for them to sell off in different counties 82 00:04:39,240 --> 00:04:42,400 Speaker 1: where they have overlaps to sell off those plans. Now 83 00:04:43,120 --> 00:04:46,480 Speaker 1: they really overlap across the country a lot in medicare advantage, 84 00:04:46,520 --> 00:04:49,360 Speaker 1: and it would have taken a significant number of divestitures, 85 00:04:49,360 --> 00:04:52,160 Speaker 1: and that may be the sticking point here. On the 86 00:04:52,160 --> 00:04:57,560 Speaker 1: other deal, it was less clear how that problem, the 87 00:04:57,600 --> 00:05:00,039 Speaker 1: problems there could be remedied. And the reason there's be 88 00:05:00,040 --> 00:05:03,840 Speaker 1: has Anthem and Signa really compete more in a national 89 00:05:04,279 --> 00:05:08,440 Speaker 1: In a national scale, they offer administrative services for large 90 00:05:08,480 --> 00:05:11,520 Speaker 1: companies that self ensure um and a lot of these 91 00:05:11,600 --> 00:05:14,680 Speaker 1: large companies, like what we saw in the Stables deal, 92 00:05:14,720 --> 00:05:17,400 Speaker 1: and like what we saw in in the Cisco US 93 00:05:17,440 --> 00:05:20,760 Speaker 1: Food seal, like one entity or even two with which 94 00:05:20,800 --> 00:05:24,240 Speaker 1: they can contract contract across the country for all of 95 00:05:24,279 --> 00:05:27,040 Speaker 1: their divisions and branches. And it's harder to see how 96 00:05:27,080 --> 00:05:30,440 Speaker 1: you might fix the significant overlap those two companies have 97 00:05:30,600 --> 00:05:35,840 Speaker 1: in administrative services. So this is all about competition right exactly. Now, 98 00:05:35,880 --> 00:05:39,520 Speaker 1: as far as the companies are concerned, can they then 99 00:05:39,560 --> 00:05:42,280 Speaker 1: appeal the decision whatever that may or may not be 100 00:05:42,440 --> 00:05:45,479 Speaker 1: from the Justice Department. Oh, of course, from here it 101 00:05:45,480 --> 00:05:49,160 Speaker 1: goes into practically, you know, essentially litigation. The Department of 102 00:05:49,200 --> 00:05:52,560 Speaker 1: Justice does not have the power to block a merger 103 00:05:52,640 --> 00:05:54,920 Speaker 1: that it thinks is anti competitive or we'll have do 104 00:05:55,000 --> 00:05:58,000 Speaker 1: will cause harm to the market. The Department of Justice 105 00:05:58,040 --> 00:06:01,480 Speaker 1: has to ask a judge to issue in order blocking 106 00:06:01,520 --> 00:06:04,000 Speaker 1: the deal. And that's what we're hearing now that Bloomberg 107 00:06:04,040 --> 00:06:07,400 Speaker 1: News basically has reported that they're hearing that the Department 108 00:06:07,400 --> 00:06:10,120 Speaker 1: of Justice is ready to go to court to ask 109 00:06:10,240 --> 00:06:13,520 Speaker 1: a judge to or judges since it's two deals to 110 00:06:13,720 --> 00:06:17,080 Speaker 1: block these deals. Um, and what they have to do 111 00:06:17,520 --> 00:06:20,160 Speaker 1: is win in court, so you still have a possibility 112 00:06:20,240 --> 00:06:24,880 Speaker 1: a that the parties can settle these matters. Um. This 113 00:06:24,920 --> 00:06:27,919 Speaker 1: has happened sometimes after a complaint is filed or be 114 00:06:28,600 --> 00:06:31,080 Speaker 1: that the Department of Justice loses in court, which also 115 00:06:31,200 --> 00:06:35,479 Speaker 1: sometimes happens. The deals are not the same, just to 116 00:06:35,560 --> 00:06:37,360 Speaker 1: be clear, right right, don't want I mean, even though 117 00:06:37,520 --> 00:06:39,960 Speaker 1: we're talking about healthcare deals. I mean, for example, the 118 00:06:40,040 --> 00:06:44,039 Speaker 1: Anthem Signet deal would be a forty eight billion dollar deal, 119 00:06:44,400 --> 00:06:47,919 Speaker 1: and that would create a health insurer with what like 120 00:06:48,120 --> 00:06:52,280 Speaker 1: fifty four million members and a hundred and seventeen billion 121 00:06:52,279 --> 00:06:56,200 Speaker 1: dollars in annual revenue. Right, Yes, that's a much bigger deal, 122 00:06:56,240 --> 00:06:58,279 Speaker 1: and I think all along, even a year ago, a 123 00:06:58,320 --> 00:07:01,760 Speaker 1: lot of analysts expected that deal to have more trouble 124 00:07:01,800 --> 00:07:04,040 Speaker 1: getting through the d o J than the smaller Ethnic 125 00:07:04,080 --> 00:07:07,200 Speaker 1: Humanity deal, which is not only smaller but different in 126 00:07:07,320 --> 00:07:10,160 Speaker 1: nature in the way those two companies compete. Yeah, that's 127 00:07:10,160 --> 00:07:13,320 Speaker 1: about a lot about the medicare plans correct, All right, Well, 128 00:07:13,360 --> 00:07:14,920 Speaker 1: you're gonna have to keep us up to date on 129 00:07:15,000 --> 00:07:17,520 Speaker 1: what goes on. Thank you very much, absolutely, thank you. 130 00:07:17,760 --> 00:07:22,920 Speaker 1: Jennifer Ree, litigation analyst for Bloomberg Intelligence of Bloomberg Intelligence 131 00:07:22,960 --> 00:07:26,720 Speaker 1: providing unique real time research and context on a variety 132 00:07:26,720 --> 00:07:31,080 Speaker 1: of industries and all markets and government factors that affect businesses. 133 00:07:31,360 --> 00:07:35,760 Speaker 1: Our terminal customers can access this function by typing b 134 00:07:35,760 --> 00:07:46,360 Speaker 1: I go, I'm pim Fox and this is Bloomberg. Bloomberg 135 00:07:46,360 --> 00:07:48,400 Speaker 1: taking Stock is brought to by New York Community Bank. 136 00:07:48,480 --> 00:07:51,120 Speaker 1: Ask about their my Community interest checking with free New 137 00:07:51,160 --> 00:07:54,760 Speaker 1: York Community Bank online and mobile banking. 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