Anthem gives up Cigna bid, vows to fight on over damages

  • Anthem gives up Cigna bid, vows to fight on over damages

Anthem gives up Cigna bid, vows to fight on over damages

A DE judge's ruling late Thursday that Cigna can walk away from the $48 billion health insurance merger leaves few options for Anthem.

U.S. health insurer Cigna said it has notched a win in its legal battle with rival and one-time prospective merger partner Anthem. At one point, Anthem executives tried to move forward unilaterally since Cigna ceased cooperating with them on various deal-related issues.

"The reality is both parties probably have some risk and they'll bargain for something between zero and $1.85 billion", said Matt Cantor, an antitrust lawyer at Constantine Cannon.

But the company threw in the towel in mid-February after the deal was successfully opposed in federal court by the Department of Justice with backing from eleven USA states.

Laster said Anthem's chances of salvaging the merger were remote, although Anthem sought more time to try and fix the deal.

Laster gave Anthem until Monday at noon Eastern time to decide whether to appeal his decision.

"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", Anthem's announcement added.

Anthem and Cigna have been in legal disputes since the U.S. Justice Department won its case to block the merger of the two health insurers on antitrust grounds.

Cigna filed a lawsuit in February against Anthem, demanding an end to the merger agreement and seeking damages totaling $13 billion. On the rare occasions when the Cigna team did speak, it usually didn't help Anthem's position.

"That's the next big question", she said. Anthem CEO Joseph Swedish has said he might attempt to use deals to expand in Medicare Advantage, the lucrative business of selling private health plans for the elderly. The company said on Friday it would repurchase at least $1.6 billion in stock by the end of the year. Just last week, the company went all the way up to the Supreme Court in a bid to save the flailing deal and asked the DE judge. That judge ruled against Anthem on Thursday, but offered the Indianapolis-based company the chance to appeal.

A DE judge granted Anthem a temporary restraining order against Cigna in February, the Court of Appeals granted its request for an expedited appeal and President Donald Trump announced he had picked longtime Anthem lobbyist Makan Delrahim to head the DOJ's antitrust division.

The Justice Department filed an antitrust lawsuit against the deal previous year.