After 18 months of courtship and court cases, two massive deals that would have reshaped the U.S. health insurance industry have both been declared dead, blocked by judges who said they’d do unacceptable harm to competition in the industry.

Now, the companies are right back where they started. Anthem Inc.’s $48 billion deal to buy Cigna Corp. was blocked by a federal judge late Wednesday, weeks after another judge halted Aetna Inc.’s bid for Humana Inc. Anthem said it’ll appeal, and Aetna and Humana have said they’re still deciding where to appeal.

The question now becomes what the companies will do with the large piles of cash they allocated for the acquisitions, and whether they’ll try anew at fresh takeovers under a Trump administration, whose antitrust officials could be more amenable to large consolidations. They could also opt for something more conservative in the face of widespread uncertainty about the future of the U.S. health system. But first, they may be back in court.

“Anthem is significantly disappointed by the decision,” Chief Executive Officer Joseph Swedish said in a statement. “If not overturned, the consequences of the decision are far-reaching and will hurt American consumers.”

Cigna, for its part, said it “intends to carefully review the opinion and evaluate its options in accordance with the merger agreement.” CEO David Cordani has estimated that his company will have $7 billion to $14 billion of deployable capital, with the high end including extra debt the company could take on if it decided to make acquisitions.

“We have a track record of being very disciplined relative to our capital priorities and not allowing surplus capital to sit around,” Cordani said on Jan. 11.

Fresh deals?

Humana may be a target, once again. Cigna or Anthem may make a bid for the Louisville, Kentucky-based company, which specializes in the fast-growing business of selling private health plans for the elderly, said Ana Gupte, an analyst at Leerink Partners. Cigna could also bid for WellCare Health Plans Inc., she said.

Related: Aetna CEO threatened to abandon ACA in response to blocked merger

Also likely are more conservative moves by the companies, like buying back shares or investing in their own businesses, said Sarah James of Piper Jaffray.

“The four deal stocks have been hoarding cash for 18 months, and now that the rulings have been announced, we believe the companies will look to deploy the capital,” she said in a note to clients. “The companies will most likely favor share repurchases.”

The ruling was largely expected, and moves in the companies’ shares were muted. Cigna lost 0.6 percent to $147.03 at 9:58 a.m. in New York. Anthem fell 0.5 percent to $157.85.

The Justice Department, along with the antitrust division that sued to block the deals, could be remade under new Attorney General Jeff Sessions, who was confirmed Wednesday. While antitrust officials under the Obama administration aggressively blocked a number of megadeals, over time the antitrust laws have ensured some consistency in enforcement between Republican and Democratic administrations.

Holdover case

The case is a holdover from the Obama administration, where the Justice Department thwarted several mega-mergers, including Comcast Corp.’s attempted takeover of Time Warner Cable Inc., Halliburton Co.’s deal for Baker Hughes Inc. and AT&T Inc.’s bid for T-Mobile US Inc.

Related: Cigna sees individual health unit growing

“If health-insurance companies are thinking of merging and they don’t really compete with each other then these decisions shouldn’t discourage them,” said Martin Gaynor, a professor of economics and health policy at Carnegie Mellon University. Companies with serious overlaps in business would still face obstacles, he said.

There’s also the risk that Republicans will remake large parts of the U.S. health-care system as part of their plan to repeal and replace the Affordable Care Act. Insurance executives may wait to see which parts of the industry the new administration and Congress favor before writing checks. The ACA, which expanded the market for Medicaid health plans and for coverage sold to individuals, hasn’t been a big driver of growth for any of the firms. Still, its demise could cut off a source of growth at a time when they’re looking for ways to expand.

‘Sit back’

“We expect potential buyers to take their time,” Thomas Carroll, an analyst at Stifel Nicolaus, said in a research note. “In our view, all potential buyers will sit back, see how the new administration reshapes U.S. health care, and digest the deal commentary of the last year and a half.”

Related: Humana to write off $591M in ACA risk corridor money

Anthem has also said it would pursue deals and buybacks as its “Plan B” if the Cigna transaction didn’t go through. CEO Joseph Swedish has said he might attempt to expand in the Medicare Advantage market through acquisitions, for example.

The 18-month effort to get the transaction done was marked by discord between Anthem and Cigna. Last year, the companies accused each other of violating the merger agreement, and the government said in court that disputes among executives had undercut the rationale for the deal.

The hostility could continue. With the deal defeated, Anthem owes Cigna a $1.85 billion breakup fee under the terms of the agreement. Anthem wouldn’t have to pay the breakup fee if it could prove that Cigna committed a “willful breach” of the merger agreement.

Company disputes

The disputes, which spilled into court, harmed the deal’s chances, said U.S. District Judge Amy Berman Jackson. She called the hostility the “elephant in the courtroom.”

“Cigna officials provided compelling testimony undermining the projections of future savings, and the disagreement runs so deep that Cigna cross-examined the defendants’ own expert,” she wrote. “Anthem urges the court to look away, and it attempts to minimize the merging parties’ differences as a ‘side issue,’ a mere ‘rift between the CEOs.’ But the court cannot properly ignore the remarkable circumstances that have unfolded both before and during the trial.”

The Anthem-Cigna case turned on the market for health plans sold to employers. In her ruling, Jackson looked at its likely effect on the sale of health insurance to “national accounts” -- customers with more than 5,000 employees, usually spread over at least two states -– within the 14 states where Anthem operates as the Blue Cross Blue Shield licensee.

“Eliminating this competition from the marketplace would diminish the opportunity for the firms’ ideas to be tested and refined, when this is just the sort of innovation the antitrust rules are supposed to foster,” Jackson said in her 12-page order. Her accompanying opinion fully detailing her reasons for ruling against the deal was filed under seal.

Acting Assistant Attorney General Brent Snyder of the Justice Department’s antitrust division called the ruling “a victory for American consumers.”

“This merger would have stifled competition, harming consumers by increasing their health insurance premiums and slowing innovation aimed at lowering the costs of health care,” Snyder said in a statement.

The case is U.S. v. Anthem Inc., 16-cv-1493, U.S. District Court, District of Columbia (Washington).

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