Anthem

Anthem and Cigna have fired legal salvos against each other, with Anthem seeking to prevent the smaller insurer from terminating the proposed $48 billion megamerger that a judge has found to be anticompetitive.

In a lawsuit filed Wednesday in Delaware Court of Chancery, Anthem said there was still a “viable path forward” to completing the merger even though Cigna announced Tuesday it had exercised its right to terminate the deal.

“Cigna does not have a right to terminate the merger agreement at all because it has failed to perform fully its obligations in a manner that has proximately caused or resulted in the failure of the merger to have been consummated,” Anthem said in a news release.

The company accused Cigna of trying to “sabotage” the merger by, among other things, refusing to allow meetings with its senior management team, a necessary step to integration” and undermining the defense of the Department of Justice’s antitrust suit seeking to block the deal.

U.S. District Judge Amy Berman Jackson ruled in favor of the DoJ last week, finding that “the proposed combination is likely to have a substantial effect on competition in what is already a highly concentrated market.”

Anthem’s lawsuit followed Cigna’s announcement that in light of the court ruling, it “believes that the transaction cannot and will not achieve regulatory approval and that terminating the agreement is in the best interest of Cigna’s shareholders.”

To effect the termination, it asked a Delaware judge for a court order declaring it had lawfully terminated the merger agreement and that Anthem is not permitted to extend the termination date. Cigna is also seeking payment by Anthem of the $1.85 billion breakup fee, as well as additional damages of more than $13 billion.

“These additional damages include the amount of premium that Cigna shareholders did not realize as a result of the failed merger process,” Cigna said.

Anthem has also filed an expedited appeal of Judge Berman Jackson’s decision. The company is “committed to completing this value-creating merger either through a successful appeal or through settlement with the new leadership at the Department of Justice,” it said.

, , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *