Why the Aya–Cross Country Merger Failed: FTC Delays, Breakup Fee, and Strategic Fallout

The Cross Country-Aya transaction illustrates several important strategic, regulatory, and market dynamics. First, regulatory risk in large healthcare staffing or labor-market consolidation is increasing. The requirement for a Second Request from the FTC and the inability to meet the HSR waiting period before the agreement’s sunset date reflects heightened scrutiny and procedural delays, exacerbated by external constraints like the government shutdown. This underscores that deal timing must be built with regulatory extensions in mind.

Second, the breaking of the agreement, despite both parties’ compliance with regulatory demands, shows how contractual deadlines and procedural rigidity can decisively derail transactions—even where goodwill and regulatory alignment exist. Aya’s choice not to request another extension—citing “uncertainty, time and resource burden” associated with possible FTC challenge—signals that legal and administrative costs and risks can outweigh strategic benefits when time runs out.

For Cross Country, the end of the merger triggers a recalibration: while the $20 million fee offers some compensation, there are lost strategic synergies that were projected with Aya’s suite of staffing, marketplace, and technology capabilities. Cross Country must now rely on its internal strength—cash, tech, diversity of service lines—to sustain growth, retain talent, and maintain market relevance. The initiation of the $40 million stock buyback signals management believes the company’s equity is undervalued and wants to shore up shareholder value.

For investors and competitors, this episode raises questions: whether Aya might pursue alternative M&A targets or build organically, and whether Cross Country might become an acquisition target itself or doubling down on leadership in certain staffing verticals. Also, regulatory precedent set by the FTC here may dissuade similar large consolidations in healthcare labor markets, especially those involving travel nursing or allied health, where concentration concerns are more acute.

Open questions remain around what the FTC’s substantive competition concerns were, what internal metrics (revenue synergies, cost savings) were expected but now lost, and whether either company faces competitive disadvantage from not combining. Additionally, how both will withstand ongoing margins pressure seen in Cross Country’s recent financials—particularly declines in revenue per FTE and falling profit margins—will be key to understanding future valuation.