Judge denies Anthem injunction in suit over Cigna merger

Lawrence Kim
May 13, 2017

A judge in DE on Thursday denied Anthem's bid to enjoin Cigna from walking away from its proposed $48bn acquisition, Reuters reported, although implementation of the decision was stayed until Monday to give Anthem a chance to appeal. A February district court decision to block the proposed merger on anti-trust grounds was recently upheld by the DC Circuit Court of Appeals, but with Anthem's decision today, this anti-competitive takeover bid is finally laid to rest.

It's unclear whether or not Anthem will appeal this latest decision to the Delaware Supreme Court. As Cigna has stated, it believes that Anthem willfully breached those obligations and as a result the transaction did not receive the requisite regulatory approvals.

The conflict between the companies has been evident since previous year when the Justice Department made public that the two had accused one another of breaching the contract. Cigna wants a $1.85 billion breakup fee from Anthem, as called for in the merger agreement, plus more than $13 billion in damages.

A judge here on Thursday freed health insurer Cigna Corp.

Anthem petitioned the US Supreme Court last week to intervene in that dispute. In a statement Thursday, Cigna said, "We look forward to closing this final chapter". The Justice Department filed an antitrust suit in 2016, arguing it would decrease competition.

Anthem says it incurred what it calls "massive damages" during the almost two-year negotiation.

Anthem has argued that Cigna has worked to sabotage the merger, and that Cigna's board and senior managers refused to go along unless they could keep their positions, including demanding that Cigna CEO David Cordani be named chief executive officer of the combined company.

Cigna has asked the DE court to be freed from the deal and to rule that it is entitled to a $1.85 billion reverse breakup fee.

Delaware Chancery Judge Travis Laster said Anthem didn't deserve a 60-day extension to an earlier order barring Cigna's exit because it was "incredibly unlikely", the company could close the deal.

The judge said Anthem at some point may have a chance to collect a large monetary damages award against Cigna. Meanwhile Anthem, which has countersued, said that it will seek damages, too, and that its former merger partner isn't entitled to a termination fee. Anthem has claimed that Cigna has been uncooperative.

Other reports by Click Lancashire

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