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