There are bad breakups, and then there are breakups that involve both sides suing each other at the same time: A day after Cigna announced it would officially give up on its proposed merger with Anthem and filed a lawsuit claiming billions of dollars in damages, Anthem has turned around and filed its own lawsuit in response.
It all started back in July 2015 when Anthem announced its intention to buy Cigna for $54 billion. After a year of reviewing the proposal, the federal government and nine state attorneys general sued to block both mergers, saying that reducing the marketplace from four national insurers to two would have enormous harms on competition.
A judge agreed, ruling to block the merger last week on the grounds that it would violate antitrust laws.
While fellow healthcare giants Aetna and Humana also had their merger dreams quashed this week, they parted ways amicably.
These two, not so much: Cigna claims Anthem violated the terms of their agreement, and that its strategy was the deal’s downfall. It’s now seeking a $1.85 billion reverse termination fee from Anthem, which is par for the course when a merger fails, as well as “additional damages in an amount exceeding $13 billion.”
Anthem filed its suit in the same court, the Delaware Court of Chancery, seeking a temporary restraining order to block Cigna from ending their agreement, reports The Wall Street Journal. It’s also wants to force Cigna to stick to the terms of their deal, and is requesting damages.
Anthem said the lawsuit is a reaction to “Cigna’s campaign to sabotage the merger and to try to deflect attention from its repeated willful breaches of the merger agreement.”
Though Cigna said the merger “cannot and will not achieve regulatory approval,” Anthem said today that it “believes that there is still sufficient time and a viable path forward potentially to complete the transaction” and it is “committed to completing this value-creating merger either through a successful appeal or through settlement with the new leadership at the Department of Justice.”
To that end, Anthem argues that Cigna doesn’t have the right to break things off, and that it has extended the deadline to close the deal to April 30.
Anthem is currently appealing the judge’s antitrust ruling, but it won’t be easy to keep the deal alive, especially with Cigna trying to get away from it. The WSJ notes that even if Cigna sticks around until the end of April, that’s not much time to clear all the legal and regulatory obstacles standing in the way.
by Mary Beth Quirk via Consumerist