The last few months in mergers and acquisition (M&A) activity in healthcare have been dominated by massive deals proposed across sectors—like drugstore chain CVS Health wanting to buy health insurer Aetna for $69 billion. What those companies should watch for, writes Morning Consult’s Jon Reid, is the result of the case challenging a merger with similar dynamics: the combination of AT&T and Time Warner.
Like the CVS-Aetna and Cigna-Express Scripts deals, the merger between AT&T and Time Warner would be a vertical integration, not the horizontal mergers the DOJ has fought in recent years like the abandoned combination of insurance giants Anthem and Cigna. If the $85 billion AT&T-Time Warner deal is blocked on antitrust grounds, however, the DOJ’s strategy may change.
“The federal agencies have not litigated a vertical merger case in roughly 40 years,” William Kovacic, a law professor at George Washington University and a Federal Trade Commission member from 2006 to 2011, said to Morning Consult. If the DOJ wins in the AT&T-Time Warner case, “the government will have a more confident basis for challenging other vertical deals in the future,” he said.
So far, however, the DOJ hasn’t challenged any of the recently announced megamergers.
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John joined TriMed in 2016, focusing on healthcare policy and regulation. After graduating from Columbia College Chicago, he worked at FM News Chicago and Rivet News Radio, and worked on the state government and politics beat for the Illinois Radio Network. Outside of work, you may find him adding to his never-ending graphic novel collection.