NEWS

Cigna Terminates Merger With Anthem, Both Insurers Sue

February 15, 2017

In response to Cigna’s request to exercise its right to terminate a failed $48 billion merger with Anthem Inc, both insurers have become entangled in lawsuits, according to recent reports.

Following a recent court order from the US District Court for the District of Columbia that halted the Anthem-Cigna merger, Cigna announced that it has exercised its right to terminate the proposed merger, and is seeking a $1.85 billion reverse termination fee from Anthem. Furthermore, Cigna has filed a lawsuit seeking an additional $13 billion in damages for its shareholders.

In response, Anthem Inc recently announced it has filed a lawsuit seeking a temporary restraining order to block Cigna’s termination request.

A federal judge ruled last week that the merger deal would have exacerbated competition in an already highly concentrated market. Similarly, the US Justice Department sued to stop the deal in July 2016.

As justification for their restraining order request, Anthem has stated that they feel there is still a possible path towards successfully executing the merger contract. “There is still sufficient time and a viable path forward potentially to complete the transaction that will save millions of Americans more than $2 billion in annual medical costs and deliver significant value to shareholders,” Anthem wrote in a press release.

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Anthem said it is pursuing an expedited appeal of the District Court’s decision, and it is committed to complete the merger through a successful appeal or through a settlement with the new leadership at the Department of Justice.

“Cigna’s lawsuit and purported termination is the next step in Cigna’s campaign to sabotage the merger and to try to deflect attention from its repeated willful breaches of the Merger Agreement in support of such effort,” wrote Anthem.

Cigna has stated that their suit seeks declaratory judgement that the company has lawfully terminated the merger agreement, and that Anthem is not permitted to extend the termination date under the terms of the merger agreement.

“Cigna is disappointed in the outcome of this process,” Cigna stated in a press release. “Cigna fulfilled all of its contractual obligations and fully cooperated with Anthem throughout the approval process.”

Julie Gould