Shares of Humana and Cigna both fell sharply on the news. Humana fell 5.3 percent to $151.22 at 11:59 a.m. in New York, and Cigna fell 1.9 percent to $130.62. Anthem fell 2.7 percent to $131.36, and Aetna fell 2.9 percent to $114.92.

The Justice Department declined to comment on the review.

“We are steadfast in our belief that this deal is good for consumers and the health-care system as a whole,” T.J. Crawford, an Aetna spokesman, said.

Alex Kepnes, a Humana spokesman, didn’t immediately respond to requests for comment. Matt Asensio, a Cigna spokesman, declined to comment, and Bonnie Jacobs, an Anthem spokeswoman, had no immediate comment.

Deal skepticism

Any lawsuit would continue a string of merger challenges by antitrust enforcers looking to stop industry consolidation and would deal a blow to bids by Anthem and Aetna to gain scale by snapping up rivals. According to the terms of both tie-up deals, the companies have agreed to fight any government lawsuits in court. Such a move would likely require months of litigation to rescue takeovers that were struck last year amid a wave of deals that swept the industry.

Aetna and Humana will probably fight any lawsuit in court, while Anthem and Cigna are less likely to litigate against the government, said Ana Gupte, an analyst at Leerink Partners.

“They’re obligated by the terms of their merger agreement, but they both may decide to walk away,” she said about Anthem’s bid for Cigna. “They recognize the probability is low, and there’s also been a lot of conflict between the two companies.”

For antitrust officials at the Justice Department, it’s standard practice to prepare complaints against deals even in cases that are ultimately settled with remedies like asset sales. But in recent years, the department has shown an increasing willingness to go to court to block deals it believes could stifle competition, and for months antitrust officials have signaled their skepticism about the insurer tie-ups.

The Justice Department’s No. 3 official, Bill Baer, who previously ran the antitrust division and is overseeing the investigations into the insurer mergers, said this year that the two deals were “transformational” and represented a “game changer” for the industry.

Competition concerns

The government’s concerns echo a broader sentiment within the Obama administration that competition must be protected among health insurers in order to deliver quality health care to Americans. This month, President Barack Obama and Health and Human Services Secretary Sylvia Mathews Burwell both cited the importance of competition in insurance markets.

In addition to the Justice Department’s antitrust division, state attorneys general also have raised concerns about the mergers and may join any Justice Department challenge, two people said.

The insurers need approval from state insurance regulators in addition to the Justice Department. Aetna has secured far more state approvals for its deal than Anthem has, according to analysts at Wells Fargo & Co. Aetna has gotten approvals from 18 of 20 states where regulatory sign-off is needed, while Anthem has regulatory approvals in just 10 of 24 states, analysts led by Peter Costa said in a July 14 research note.

Fight lawsuits

The combinations faced criticism from the start from consumer groups worried about higher premiums as well as from hospitals and doctors, who risk seeing lower payments from insurers that have more bargaining power. In June, a group of Democratic senators called for the Justice Department to stop the transactions.

America’s Health Insurance Plans, which represents the health-insurance industry, has said that insurers can counter the growing pricing power of hospitals, which themselves have grown larger through mergers, and deliver benefits to consumers. Combinations must still be reviewed on a case-by-case basis, AHIP has said.

The $48 billion combination of Anthem and Cigna would create the biggest U.S. health insurer by membership, topping UnitedHealth Group Inc., with total revenue of about $117 billion. The bulk of the company’s revenue -- about 66 percent -- would come from administrative services sold to self-insured employers. The combined company would have about 29 percent of that market, according to data compiled by Bloomberg.

Aetna’s $37 billion takeover of Humana would make it the biggest provider of Medicare Advantage plans, the government insurance program for the elderly. The combined company would have about 25 percent of that market, according to Bloomberg, with about half its $115 billion in revenue coming from Medicare plans, Aetna has said.

Bloomberg reported this month that Aetna was preparing to sell assets worth several billion dollars to resolve competition problems.

Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.