Speaker 1: Global business news twenty four hours a day. If Bloomberg
Speaker 1: dot Com, the Radio plus mobile last and on your radio.
Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.
Speaker 1: I'm Charlie Pellett. The Dallas higher, SMP and NESTAK lower.
Speaker 1: This update brought to you by t to Computing, a
Speaker 1: new kind of I T solutions company for workflow, mobility
Speaker 1: and infrastructure. Let them explain how their expertise can help
Speaker 1: you gain greater business value. Visit t to computing dot
Speaker 1: com for more information. Now let's head right over to
Speaker 1: the first Word Breaking news desk for today's afternoon call,
Speaker 1: and here is Bill Maloney. Good afternoon, Charlie. Quiet day
Speaker 1: for the Dow in SMP, with the Dow currently higher
Speaker 1: by nine points, STPs down five will, the NASDAK drops
Speaker 1: twenty two, the small cap six hundred is lower by
Speaker 1: four points, and the US ten yield at one point.
Speaker 1: All tennis sectors are lower, led by losses in materials,
Speaker 1: energy and telecom down, Transports drop twenty as a biotech
Speaker 1: Sinc Thirty nine, and the VIX is higher by one
Speaker 1: point five percent. Down leaders included Mike McDonald's J and
Speaker 1: J and Boeing, Microsoft, and Goldman Sachs led to the downside.
Speaker 1: Netflix plunged fourteen percent after earnings, Philip Moore sank three
Speaker 1: percent after reporting, while vm Ware jumped as much as
Speaker 1: ten point eight percent following its results. Some of the
Speaker 1: names pointing after the Belts and I included Intuitive Surgical,
Speaker 1: Marvel Technology, Microsoft, and United Continental as emits for Microsoftware
Speaker 1: for fifty eight cents on revenues of twenty two point
Speaker 1: one three billion. Live in the first breaking news desk
Speaker 1: on Bill Maloney, Charlie all right, thank you very much,
Speaker 1: Bill Maloney in to hear live breaking news over your
Speaker 1: Bloomberg Times Squawk squ a w K on your terminal.
Speaker 1: I'm Charlie Peloton. That's a Bloomberg business flash you're listening
Speaker 1: to taking start with Kathleen Names and Pim Fox on
Speaker 1: Bloomberg Radio. The shares of ETNA are down nearly three
Speaker 1: percent today, Anthem shares down two percent, a Signa Corpet
Speaker 1: down two percent, Humanity down three and three quarters of
Speaker 1: a percent. Why while the Justice Department close to challenging
Speaker 1: Anthems proposed acquisition of Signa and Etness plan combination with Humanity,
Speaker 1: This took all according to people familiar with the matter.
Speaker 1: Here to tell us more, Jennifer relitigation analyst Bloomberg Intelligence.
Speaker 1: Bloomberg Intelligence provides unique real time research and context on
Speaker 1: a variety of industries, as well as all market and
Speaker 1: government factors that affect businesses. Our terminal customers can access
Speaker 1: this function at b I go. Jennifer, thanks for coming in.
Speaker 1: Appreciate it all, right, so tell us maybe give us
Speaker 1: an update about what has been going on. It's been
Speaker 1: going on for a long time. I think more than
Speaker 1: a year, right, Well, first, thanks for having me really
Speaker 1: appreciate it. Um, this has been going on for more
Speaker 1: than a year as a matter of fact. Second, request
Speaker 1: for information, which are really just the in depth sort
Speaker 1: of subpoena that the d o J issues to parties
Speaker 1: to investigate deals, were issued to both of these in
Speaker 1: both of these murders last July. So we're talking about
Speaker 1: a full year investigation. But nowadays that's not unusual for
Speaker 1: big complex mergers that are likely going to need remedies
Speaker 1: or actually be problematic, which it is beginning to look
Speaker 1: like these will be. Use the word remedy and I
Speaker 1: want to maybe you can define what that what that describes.
Speaker 1: So essentially, when the DJ or the FTC investigates a
Speaker 1: deal and they think Trade Commission, Federal Trade Commission, yes,
Speaker 1: sorry about that, And they think that some aspect of
Speaker 1: a merger could have a bad effect, could cause a
Speaker 1: lack of innovation or increased prices, they first look to
Speaker 1: see whether there's something that can be done, some piece
Speaker 1: of one of the businesses, let's say, that can be
Speaker 1: sold off to another competitor to replace the competition that
Speaker 1: would be lost by virtue of the merger. If that
Speaker 1: can be done, and it can be done to their
Speaker 1: the regulators satisfaction, then the larger deal, the underlying deal
Speaker 1: can usually go ahead and some small piece of business
Speaker 1: is sold off and that's usually called a remedy. It's
Speaker 1: fixing whatever the problem is. So I have none of
Speaker 1: the company has been able to fix the problem. Is
Speaker 1: this what is at stake? Well, it looks like that's
Speaker 1: the direction this is going in. We we have heard
Speaker 1: a lot about Etna and Humanita trying to fix the
Speaker 1: issues that they may have in an overlap in medicare advantage.
Speaker 1: They do, they do. They are both active in that
Speaker 1: area which is looked at locally by the Department of Justice,
Speaker 1: and a lot of us thought that there may be
Speaker 1: a way for them to sell off in different counties
Speaker 1: where they have overlaps to sell off those plans. Now
Speaker 1: they really overlap across the country a lot in medicare advantage,
Speaker 1: and it would have taken a significant number of divestitures,
Speaker 1: and that may be the sticking point here. On the
Speaker 1: other deal, it was less clear how that problem, the
Speaker 1: problems there could be remedied. And the reason there's be
Speaker 1: has Anthem and Signa really compete more in a national
Speaker 1: In a national scale, they offer administrative services for large
Speaker 1: companies that self ensure um and a lot of these
Speaker 1: large companies, like what we saw in the Stables deal,
Speaker 1: and like what we saw in in the Cisco US
Speaker 1: Food seal, like one entity or even two with which
Speaker 1: they can contract contract across the country for all of
Speaker 1: their divisions and branches. And it's harder to see how
Speaker 1: you might fix the significant overlap those two companies have
Speaker 1: in administrative services. So this is all about competition right exactly. Now,
Speaker 1: as far as the companies are concerned, can they then
Speaker 1: appeal the decision whatever that may or may not be
Speaker 1: from the Justice Department. Oh, of course, from here it
Speaker 1: goes into practically, you know, essentially litigation. The Department of
Speaker 1: Justice does not have the power to block a merger
Speaker 1: that it thinks is anti competitive or we'll have do
Speaker 1: will cause harm to the market. The Department of Justice
Speaker 1: has to ask a judge to issue in order blocking
Speaker 1: the deal. And that's what we're hearing now that Bloomberg
Speaker 1: News basically has reported that they're hearing that the Department
Speaker 1: of Justice is ready to go to court to ask
Speaker 1: a judge to or judges since it's two deals to
Speaker 1: block these deals. Um, and what they have to do
Speaker 1: is win in court, so you still have a possibility
Speaker 1: a that the parties can settle these matters. Um. This
Speaker 1: has happened sometimes after a complaint is filed or be
Speaker 1: that the Department of Justice loses in court, which also
Speaker 1: sometimes happens. The deals are not the same, just to
Speaker 1: be clear, right right, don't want I mean, even though
Speaker 1: we're talking about healthcare deals. I mean, for example, the
Speaker 1: Anthem Signet deal would be a forty eight billion dollar deal,
Speaker 1: and that would create a health insurer with what like
Speaker 1: fifty four million members and a hundred and seventeen billion
Speaker 1: dollars in annual revenue. Right, Yes, that's a much bigger deal,
Speaker 1: and I think all along, even a year ago, a
Speaker 1: lot of analysts expected that deal to have more trouble
Speaker 1: getting through the d o J than the smaller Ethnic
Speaker 1: Humanity deal, which is not only smaller but different in
Speaker 1: nature in the way those two companies compete. Yeah, that's
Speaker 1: about a lot about the medicare plans correct, All right, Well,
Speaker 1: you're gonna have to keep us up to date on
Speaker 1: what goes on. Thank you very much, absolutely, thank you.
Speaker 1: Jennifer Ree, litigation analyst for Bloomberg Intelligence of Bloomberg Intelligence
Speaker 1: providing unique real time research and context on a variety
Speaker 1: of industries and all markets and government factors that affect businesses.
Speaker 1: Our terminal customers can access this function by typing b
Speaker 1: I go, I'm pim Fox and this is Bloomberg. Bloomberg
Speaker 1: taking Stock is brought to by New York Community Bank.
Speaker 1: Ask about their my Community interest checking with free New
Speaker 1: York Community Bank online and mobile banking. Earn more, get more.
Speaker 1: Visit my NYCB dot com for details.