CARSON CITY, Nev. (AP)--The state's attorney general is reviewing UnitedHealth Group Inc.'s (NYSE:UNH) (UNH) proposed $2.6 billion purchase of Sierra Health Services Inc. (NYSE:SIE) (SIE), Nevada's largest health insurer.
Attorney General Catherine Cortez-Masto could go to state or federal court to block the deal if she determines there's an antitrust violation that could result in economic hardships for consumers facing higher premium costs, spokeswoman Nicole Moon said Tuesday.
"We have been watching this all along and have a lot of concerns," Moon said.
Minnetonka, Minn.-based UnitedHealth (NYSE:UNH) agreed in March to acquire Las Vegas- based Sierra for $43.50 a share. The deal received conditional approval Monday from state Insurance Commissioner Alice Molasky-Arman and could close by the end of the year with approval from the Justice Department and regulators in California and Arizona.
Moon said the attorney general is examining the insurance commissioner's decision "to make sure it complies with the law and is in the best interests of Nevada citizens."
The conditions Molasky-Arman imposed include a requirement that no acquisition costs be passed onto consumers or health care providers, and that premium costs and provider fees are not increased as a result of the deal. The insurance commissioner also said local home office, management and employment should continue, and benefit plans shouldn't be scaled back.
The insurance commissioner's decision prompted Gov. Jim Gibbons to say he was "deeply concerned" that constraints in Nevada law prevented her the from acting more forcefully to curb the potential for "monopolistic tendencies that can result from this merger."
UnitedHealth (NYSE:UNH) representative Peter O'Neill said both companies worked with Molasky-Arman to address concerns that had been raised by critics including the American Medical Association and the Nevada State Medical Association.
O'Neill said the conditions Molasky-Arman imposed should cover the concerns voiced by the governor or anyone else.
Sierra shares gained 22 cents to $42.16 Monday. UnitedHealth (NYSE:UNH) shares fell 56 cents to $48.63.
(END) Dow Jones Newswires 08-28-07 2028 Copyright (c) 2007 Dow Jones & Company, Inc.
