Anthem Ends Pursuit Of Cigna
The Wall Street Journal (5/12, Mathews, Kendall, Subscription Publication) reported Anthem Inc. said Friday it would give up attempts to acquire Cigna Health, which the Journal said sets the stage for a potentially rancorous legal battle over damages that could number in the billions of dollars. Anthem continues to assert that Cigna sabotaged the merger, and that Cigna is ineligible to receive $1.85 billion in break-up fees as provided in the merger agreement. Anthem said it will seek “massive damages” from Cigna.
While Delaware Judge Travis Laster denied Anthem’s request for a 60-day extension to try and make the deal happen, he also indicated “there was significant evidence Cigna may have violated the merger agreement by dragging its feet on antitrust concerns, which could entitle Anthem to ‘potentially massive damages,” Bloomberg News (5/12, Feeley, Tracer, McLaughlin) reported. Cigna issued a statement which stated its belief “that Anthem willfully breached” its obligations “and as a result the transaction did not receive the requisite regulatory approvals.”
The AP (5/12, Murphy) recounted that last year, antitrust regulators sued to stop the merger from going through. Anthem had argued at the time that the merger would allow both companies to “negotiate better prices with pharmaceutical companies, hospitals and doctor groups,” although critics maintained that such benefits would have “taken years to materialize,” and meanwhile, it would leave limited choice for customers.