Cigna seeks more than $14 billion in formal termination of Anthem deal
- Author: Todd Kelly Feb 16, 2017,
Feb 16, 2017, 0:41
Aetna will feel a bit of added sting because it owed Humana a $1 billion termination fee.
Anthem said Thursday it will appeal the federal court decision blocking its proposed Cigna purchase.
Cigna raised an issue pressed by Justice Department lawyers during the month-long antitrust case in December - that Anthem's relationship with other Blue Cross/Blue Shield companies increased the antitrust problems of the merger.
Anthem Inc. won a court ruling to temporarily block Cigna Corp. from scuttling a $48 billion merger between the health insurers.
Both proposed mergers were blocked by federal judges, who agreed with Justice Department antitrust regulators that reducing the number of major United States insurers from five to three could harm consumers. Those damages "include the lost premium value to Cigna's stockholders caused by Anthem's willful breaches of the merger agreement", according to a question-and-answer document filed with the Securities and Exchange Commission.
To effect the termination, it asked a DE judge for a court order declaring it had lawfully terminated the merger agreement and that Anthem is not permitted to extend the termination date. Anthem said it remains committed to closing the deal.
The deal's demise also ends a related agreement to sell certain Medicare Advantage plans to insurer Molina Healthcare. A suit filed in the Delaware Chancery Court Tuesday asked for that money, as well as additional damages "in an amount exceeding $13 billion", Cigna said.
Health insurers Aetna and Humana are walking away from a $34 billion merger after a federal court determined the combined company would violate anti-trust laws, CNBC reports. Aetna and Humana are two of the five largest insurance companies in the U.S.
The planned merger between Aetna Inc.
Two major mergers between leading health insurance companies collapsed today after months spent fighting the government in court.