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CVS-Aetna merger judge tells DOJ: Slow down

by NCPA | Dec 03, 2018

A federal judge isn't happy with Department of Justice lawyers' handling of the CVS-Aetna merger – and it may or may not mean anything. On Thursday, just a day after CVS and Aetna announced that their $69 billion deal had closed, Federal Judge Robert Leon scolded DOJ attorneys overseeing the deal for treating his review of the merger as a "rubber stamp."

"You need to slow this down," he is reported as saying. "You're like a freight train out of control."

In a hearing yesterday, the judge reportedly said he may require that "the merged firm hold the CVS and Aetna assets separate until he has more time to consider the settlement." Judge Leon also scheduled a hearing for Dec. 18.

It was reported that Judge Leon was particularly irked because CVS and Aetna announced the closing of the deal before he had signed off on it. Media outlets have characterized the judge's comments as "a hiccup" in the merger approval process and say it's still highly unlikely the judge will block the deal.

Under the Tunney Act, after DOJ enters its proposed consent decree with the parties (which in this case mandated certain Part D plan divestitures), a federal judge must still sign off on it – although parties routinely close deals prior to the conclusion of this process, because the courts do typically rubber stamp most consent decrees. To-date, Tunney Act proceedings have not stopped a merger.

As part of the process, interested parties have until Dec. 16 – 60 days following the date of publication of this proposed final judgment in the Federal Register, which was on Oct. 17 – to submit their comments on the proposed consent decree. NCPA will be submitting comments urging the judge to not approve the consent decree due to significant competitive concerns with the transaction that have not been addressed.