UNH actually made an offer for AET, which they rejected because of insufficient premium.
Part of the reason why CI is trading so weak is that many thought UNH would make a takeover attempt on AET, leaving CI alone at the table. Now that risk is off the table completely.
CI should rally back up to the $160+ level in the coming days.
Proposed rate increases are often in the 20+% range, hardly what you'd call caps like you(gourmetgrouper) suggested. One could say that this is in fact very bullish for insurance companies like Cigna and Anthem as it will lead to higher sales/eps with the Govt's blessing!
"The Cigna deal, coming so soon after Aetna’s announcement, would up the ante for regulators at both the state and federal levels. Analysts at Goldman Sachs Group Inc. looked at the coverage market for big, multistate employers and concluded that antitrust regulators might potentially consider it already on the borderline of concentrated, even before a merger of Cigna and Anthem.
But the analysts saw little or no risk of potential divestiture for an Anthem-Cigna combination in the Medicare Advantage, individual or small-group business."