Health insurer Cigna on Tuesday announced that it filed a lawsuit against insurer Anthem seeking to terminate a proposed merger between the two companies.
The move came after a federal judge last week blocked the proposed megamerger, which would have made the combined company the nation's largest insurer by enrollment. Federal District Court for the District of Columbia Judge Amy Berman Jackson ruled that the proposed deal would have violated antitrust law and harmed consumers by significantly reducing the number of insurance companies able to serve large employers that provide coverage for their workers.
Anthem earlier this week filed a motion with the District of Columbia Court of Appeals to appeal the ruling and sought an expedited appeal process.
Cigna sues Anthem
Cigna announced that it is moving to unilaterally terminate its $54 billion merger agreement with Anthem because the deal "cannot and will not achieve regulatory approval." The company said terminating the deal was in its shareholders' best interest.
According to a release, Cigna is seeking a declaratory judgment that it ended the merger agreement lawfully. Cigna also is requesting a judgment that bars Anthem from further extending the merger agreement's termination date.
In addition, Cigna is seeking the $1.85 billion breakup fee Anthem owes Cigna under their merger agreement if the deal does not proceed, as well as more than $13 billion in damages. According to Cigna, the "additional damages include the amount of premium that Cigna shareholders did not realize as a result of the failed merger process."
Anthem responds, files suit to block Cigna from terminating deal
Anthem spokesperson Jill Belcher on Tuesday said Cigna "does not have a right to terminate the proposed merger," adding that Anthem would "continue to enforce its rights under" the agreement.
Anthem on Wednesday announced that it has filed a lawsuit seeking a temporary restraining order to block Cigna from terminating the deal, alleging that Cigna has tried to "sabotage" the proposed merger and has "repeated[ly]" and "willful[ly]" breached the merger agreement. Anthem in a release accused Cigna of:
- Failing to provide leadership at meetings regarding the merger;
- Helping the Department of Justice obtain correspondence that alleged Anthem breached the merger agreement; and
- Impeding Anthem's efforts to obtain an expedited appeal of the ruling blocking the companies' proposed merger.
According to the Associated Press, Cigna has called Anthem's allegations "meritless" (Mulero/Muchmore, Healthcare Dive, 2/14; Johnson, "Wonkblog," Washington Post, 2/14; Livingston, Modern Healthcare, 2/14; Cigna release, 2/14; Herman, Axios, 2/14; Banerjee; Reuters, 2/15; Murphy, AP/Sacramento Bee, 2/15).
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