Behind the scenes of the months-long Humana acquisition drama, Aetna CEO Mark Bertolini bested Cigna Corp. CEO David Cordani at every turn. Cordani wound up getting very little of what he wanted, including a top job.
The public face of the high-stakes negotiations, whose ups and down were revealed last week in a Humana Securities and Exchange Commission filing, resembled nothing so much as speed dating. It eventually led to the pending marriages between Aetna and Humana, and between Anthem and Cigna.
But one party at the altar received very little of what he sought. Aetna bought Humana for $230 per share—the same price Cigna had offered for the Louisville, Ky.-based managed-care insurer just two months earlier. A few weeks later, Anthem bought Cigna amid a testy airing of grievances that left Anthem CEO Joe Swedish, 64, in the top spot and Cordani, 49, without any assurance he will lead Anthem after Swedish retires.
Those two proposed deals, which still must pass antitrust scrutiny, capped a year of negotiations among the nation's top five insurers. They say they need sufficient scale in a rapidly changing payment environment to make their heavy investments in people and technology for managing the health of their enrolled populations.
UnitedHealth Group began the mating ritual by opening talks with Aetna last August, which led to its $104-per-share offer on Jan. 14.
That was just a day after Aetna's Bertolini told the annual J.P. Morgan Healthcare Conference in San Francisco that his company was prepared for any merger wave.
“It'll take one transaction to tip the whole thing off,” Bertolini said. Aetna rejected UnitedHealth's low-ball offer, calling it unattractive, and began scoping out other options.
Humana had begun its hunt for a partner last October with Cigna, not Aetna, when CEO Bruce Broussard met with Cigna's Cordani to discuss the possibility of combining their companies, according to the SEC filing. Humana later brought on Goldman Sachs as a financial adviser to develop alternative consolidation scenarios. In March, Broussard met separately with Swedish and Bertolini to discuss potential mergers.