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Published: Sat, May 13, 2017
Economy | By Melissa Porter

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

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

Anthem also plans to seek damages against.

In response, Anthem filed, and was granted, a temporary restraining order to keep Cigna in the contract while it pursued an appeal of the judge's ruling.

"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.

Reuters says Laster's ruling won't go into effect until Monday, leaving them time to appeal his decision to the Delaware Supreme Court.

Cigna and Anthem aren't the only mega-insurers to see their tie-up plans thwarted by courts this year.

Anthem argues that Cigna isn't entitled to the breakup fee and it is seeking an unspecified amount of damages "for all forms of loss" that it alleges were caused by Cigna.

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 U.S. states.

The two companies exchanged lawsuits in the wake of a separate ruling earlier this year that blocked Cigna's proposed $48bn acquisition of Anthem, after USA antitrust regulators ruled that its effect "may be substantially to lessen competition" in "what is already a highly concentrated market".

"The termination of the Anthem-Cigna merger is a clear victory to preserve competition in the health insurance industry", American Medical Association President Andrew W. Gurman said in a statement.

"That's the next big question", she said. The high end of that range includes extra debt the company could take on if it chose to make acquisitions, Cordani has said.

The announcement comes after the Delaware Court of Chancery denied Anthem's motion to overturn previous court decisions to halt the merger.

There are a plethora of other partners for either company. Humana, which has a market value of about $33 billion, specializes in Medicare Advantage. The company's board ousted the CEO and CFO brothers who long led the firm their father founded.

Kaiser Permanente to Remain in ACA Markets While some insurers are fleeing the Affordable Care Act (ACA) exchanges, Kaiser Permanente will stay in the marketplace in 2018. Republicans are working to gut the law and rewrite insurance rules.

Barring a successful appeal at the Delaware Supreme Court, the two sides will likely continue to fight over a $1.85 billion break-up fee and damages for failing to close the deal.

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