Shelby Livingston | May 11, 2017
Cigna Corp. has been cleared to walk away from its proposed $54 billion merger agreement with insurer Anthem, a Delaware Chancery Court judge ruled late Thursday.
Judge Travis Laster denied Anthem’s request to block Cigna from terminating the agreement, but stayed the ruling until noon on Monday to give Anthem time to decide whether it will appeal the decision.
Cigna initially tried to end its relationship with Anthem in February, but was blocked by a temporary restraining order. In a statement Thursday, Cigna said, “We look forward to closing this final chapter.” Anthem did not return a request for comment.
The ruling comes three months after a U.S. District Court judge blocked the merger, saying it threatened to harm competition in the national employer market, and more than a year and a half after the two insurers struck the deal.
Cigna may now be entitled to a $1.85 billion breakup fee, according to the insurers’ merger agreement.
The road to merge has been a bumpy one fraught with tension. Cigna and Anthem’s relationship quickly turned sour after they agreed to combine in July 2015. While Anthem has repeatedly said it is committed the deal, Cigna often seemed reluctant.
In the February district court opinion blocking the merger, Judge Amy Berman Jackson wrote that Cigna executives were actively warning against the deal, and that the relationship between the two companies was “the elephant in the room.”
Anthem immediately appealed Jackson’s decision. Cigna, however, tried to end the merger agreement with Anthem and sued the Indianapolis-based insurer for the $1.85 billion breakup fee plus $13 billion in damages.
Anthem sought and won a restraining order preventing Cigna from bailing on the agreement. Early this month, Anthem lost an appeal of the Jackson’s ruling barring the Cigna acquisition. Last week, Anthem said it would ask the Supreme Court to review its case.
Source: Modern Healthcare
http://www.modernhealthcare.com/article/20170511/NEWS/170519950