Cigna terminates merger with Anthem

Cigna Corp. (NYSE: CI) terminated its merger agreement with American health insurance company, Anthem, Inc. (NYSE: ANTM) and claimed they want $13 billion in damages from Anthem on top of its $1.85 billion break-up fee in the deal. The Bloomfield, Conn.-based insurer said the deliberate $54 billion merger that was denied by federal court on anti-competitive grounds “cannot and will not achieve regulatory approval” and that calling it off is best for its shareholders. 

Cigna suspected that Anthem “willfully breached” the merger agreement in a way that made it unlikely the deal would be approved and has harmed Cigna’s shareholders. According to CNBC, Cigna said it filed a lawsuit against Anthem in the Delaware Court of Chancery seeking full payment of the break-up fee and an amount exceeding $13 billion, because that’s what Cigna shareholders did not obtain as a result of the merger falling through, the insurer said. Cigna is also seeking declaratory judgment that it lawfully terminated the agreement and that Anthem cannot extend the agreement further. Last month before the district court ruling, Anthem announced that it extended its merger agreement with Cigna through April 30 because it anticipated needing more time to gain approval. Cigna said it would evaluate its options once the court ruled. In a statement Tuesday, Anthem argued that Cigna’s “purported termination of the merger agreement is invalid” because it does not have the right to terminate the agreement. On Wednesday, Anthem announced that it was seeking a restraining order against Cigna, which had been attempting to “sabotage” the deal throughout the process.

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