• State decision on Anthem-Cigna merger is still pending
  • Aetna expects acquisition to close in second half of 2016

Aetna Inc.’s $37 billion deal to buy Humana Inc. was approved by the California Department of Managed Health Care, which said Monday that it could move forward after the company agreed to invest in the state’s health-care infrastructure.

Humana’s stock rose 1.9 percent to $190.74 at 3:07 p.m. New York time. Aetna gained 1.5 percent to $122.88.

California’s sign-off comes as federal regulators are considering the antitrust risks of the deal, as well as of Anthem Inc.’s $48 billion takeover of Cigna Corp. On Sunday, the Wall Street Journal reported that Justice Department officials are questioning whether enough concessions can be made for Anthem and Cigna’s deal to be approved.

The California regulator said in a statement that Aetna would provide almost $50 million in community investments as part of the agreement. The Hartford, Connecticut-based insurer will also keep key functions and operations in the state.

“This is the latest positive step in the approval process, as we move closer to a combined company,” Aetna spokesman T.J. Crawford said in an e-mail. Aetna expects the cash and stock merger to close in the second half of 2016, he said.

Anthem Waits

California has not signed off on Anthem’s acquisition of Cigna and Rodger Butler, a spokesman for the Department of Managed Health Care, said he couldn’t give a timeline for a decision.

“It is still under review,” Butler said in a phone interview. Cigna shares fell 1.3 percent to $127.88. Anthem shares rose less than 1 percent.

Centene Corp., Molina Healthcare Inc. and WellCare Health Plans Inc. -- potential targets for Anthem or Cigna if their deal breaks down -- rose Monday. Centene was up 3.6 percent to $69.42, Molina gained 1.9 percent to $51.98 and WellCare rose 3.8 percent to $109.21.

Challenges to the health insurance mergers have been growing, with an influential doctors’ group and presumptive Democratic presidential nominee Hillary Clinton both calling for reviews.

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