Anthem Ends Cigna Merger Agreement
May 2017 ~
Following the Delaware Court of Chancery denial of Anthem’s motion to keep Cigna in the deal, the insurer has announced that it will no longer pursue its $54 billion proposed acquisition with Cigna.
Anthem has since delivered a notice to Cigna officially ending the merger agreement between the two insurers. The insurer claims Cigna sabotaged the deal and states it will not pay the agreed-upon $1.85 billion contractual breakup fee, stating in merger termination announcement “[Cigna] has failed to perform and comply in all material respects with its contractual obligations.”
Anthem continues, “Cigna’s repeated willful breaches of the merger agreement and its successful sabotage of the transaction has caused Anthem to suffer massive damages, claims which Anthem intends to vigorously pursue against Cigna.”
Cigna has stated in an SEC filing that it intends to “vigorously defend” and pursue its claims in a lawsuit against Anthem in which they are seeking the breakup fee as well as over $13 billion in damages. Additionally, according to its announcement of the terminated merger, Cigna also plans to “immediately increase the open market share repurchase activity as a result of the termination of the transaction.”
“The termination of the Anthem-Cigna merger is a clear victory to preserve competition in the health insurance industry,” American Medical Association President Andrew W. Gurman said in a statement. “Competition, not consolidation, is the right prescription for health insurance markets.”
Source(s): Anthem; Healthcare DIVE; Modern Healthcare; Healthcare Finance;