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

Now, the companies are right back where they started. Anthem Inc.’s $48 billion deal to buy CignaCorp. was blocked by a federal judge late Wednesday, weeks afteranother judge halted Aetna Inc.’s bid for Humana Inc. Anthem saidit’ll appeal, and Aetna and Humana have said they’re stilldeciding where to appeal.

The question now becomes what the companies will do with thelarge piles of cash they allocated for the acquisitions, andwhether they’ll try anew at fresh takeovers under a Trumpadministration, whose antitrust officials could be more amenable tolarge consolidations. They could also opt for something moreconservative in the face of widespread uncertainty about the futureof the U.S. health system. But first, they may be back incourt.

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

Cigna, for its part, said it “intends to carefully review theopinion and evaluate its options in accordance with the mergeragreement.” CEO David Cordani has estimated that his company willhave $7 billion to $14 billion of deployable capital, with the highend including extra debt the company could take on if it decided tomake acquisitions.

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

Fresh deals?

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

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

Also likely are more conservative moves by the companies, likebuying back shares or investing in their own businesses, said SarahJames of Piper Jaffray.

“The four deal stocks have been hoarding cash for 18 months, andnow that the rulings have been announced, we believe the companieswill 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 thatsued to block the deals, could be remade under new Attorney GeneralJeff Sessions, who was confirmed Wednesday. While antitrustofficials under the Obama administration aggressively blocked anumber of megadeals, over time the antitrust laws have ensured someconsistency in enforcement between Republican and Democraticadministrations.

Holdover case

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

Related: Cigna sees individual health unitgrowing

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

There’s also the risk that Republicans will remake large partsof the U.S. health-care system as part of their plan to repeal andreplace the Affordable Care Act. Insurance executives may wait tosee which parts of the industry the new administration and Congressfavor before writing checks. The ACA, which expanded the market forMedicaid health plans and for coverage sold to individuals, hasn’tbeen a big driver of growth for any of the firms. Still, its demisecould cut off a source of growth at a time when they’re looking forways 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 ourview, all potential buyers will sit back, see how the newadministration reshapes U.S. health care, and digest the dealcommentary of the last year and a half.”

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

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

The 18-month effort to get the transaction done was marked bydiscord between Anthem and Cigna. Last year, the companies accusedeach other of violating the merger agreement, and the governmentsaid in court that disputes among executives had undercut therationale for the deal.

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

Company disputes

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

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

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

“Eliminating this competition from the marketplace woulddiminish the opportunity for the firms’ ideas to be tested andrefined, when this is just the sort of innovation the antitrustrules are supposed to foster,” Jackson said in her 12-page order.Her accompanying opinion fully detailing her reasons for rulingagainst the deal was filed under seal.

Acting Assistant Attorney General Brent Snyder of the JusticeDepartment’s antitrust division called the ruling “a victory forAmerican consumers.”

“This merger would have stifled competition, harming consumersby increasing their health insurance premiums and slowinginnovation aimed at lowering the costs of health care,” Snyder saidin a statement.

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

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