With shares down and cash in hand, each could be pushed quickly toward alternative transactions if the deal falls apart, according to Ana Gupte, an analyst at Leerink Partners.

“Cigna has a very strong balance sheet so they need to deploy that and grow and offer upside to their stock,” said Gupte, who gives Anthem’s acquisition of Cigna less than a 50 percent chance to win regulatory approval. Anthem might need an acquisition to ward off a drop in earnings next year, she said.

Anthem and Cigna declined to comment. Earlier this week, Anthem said the companies continue to be in talks with regulators about what it called their “compelling combination.”

Threatens competition

During a meeting Friday with the companies, the Justice Department indicated that it’s open to proposals from the firms to address the problems, according to people familiar with the matter. Still, the regulators’ skepticism that the deal can be fixed raises the chances that the U.S. will sue to block it, as soon as next month. The Justice Department didn’t comment.

Aetna declined to comment on potential sales of its units.

“Right now, we are focused on completing our combination with Humana and maximizing the many benefits that will result from it,” Matthew Clyburn, an Aetna spokesman, said by e-mail.

‘Room to move’

Cigna is trading below its share price before the deal speculation heated up, indicating that investors doubt the purchase, announced almost a year ago, will proceed. The stock declined 12 percent this year to $128.83 as of Wednesday’s close, after trading above $170 in June 2015. The shares dropped 1.9 percent to $126.89 at 10:45 a.m. in New York. Anthem fell less than 1 percent to $131.06 and had lost 5.7 percent this year as of Wednesday’s close.

If the Justice Department sues to block the deal, Anthem and Cigna could be required to mount a fight in court. However, opting to end their deal would free them to pursue other acquisitions, Peter Costa, an analyst at Wells Fargo & Co., said Thursday in a research note.

Cigna would likely have some extra cash to make deals if the transaction falls apart. Under the terms of the merger agreement, Anthem would owe Cigna a breakup fee of $1.85 billion.

“The breakup fee gives them additional capital and room to move,” said Jason McGorman, an analyst at Bloomberg Intelligence.

If Cigna doesn’t get bought, it might consider a bid for WellCare, Molina or Centene, all of which specialize in government-funded health plans like Medicare for the elderly and Medicaid for the poor. WellCare is the most likely target, while Molina, which has significant family ownership, is less likely to sell, said Tom Carroll, an analyst at Stifel Financial Corp.

Acquirer, not acquiree

WellCare and Molina would offer Cigna a bigger position in the Medicaid and Medicare markets, and Molina would give the company a bigger position in the Affordable Care Act’s health-insurance exchanges as well. Gupte said Cigna probably wouldn’t target Centene, because the deal would make the insurer too large in Medicaid.

Centene isn’t eager to sell itself, CEO Michael Neidorff said by email.

“Centene will continue to be an acquirer in the industry, not an acquiree,” Neidorff said, adding that the company will do whatever is in shareholders’ best interests. “It will be difficult for anyone to pay what we will be worth in the next 12 months.”

Molina declined to comment and WellCare didn’t return requests for comment.

Anthem interest

Anthem has said that if the Cigna deal falls apart, it would consider buying health plans divested from Aetna and Humana, according to a note to investors from Susquehanna International Group analyst Chris Rigg. Anthem is also interested in using acquisitions to expand in Medicaid, Rigg wrote June 21.

With about 6 million existing Medicaid members, Anthem might find antitrust approval for an acquisition of a large Medicaid company difficult to obtain, Leerink’s Gupte said. The insurer has just 1.4 million Medicare customers.

Adding Anthem and Cigna as bidders for assets that Humana and Aetna have to divest could make it easier for that deal to gain approval, according to McGorman, the Bloomberg analyst. Anthem and Aetna aren’t currently in talks on asset sales, according to a person familiar with the matter.

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