Anthem on Friday announced that it has terminated its proposed $54 billion merger agreement with Cigna.
The announcement came one day after a Delaware Judge denied Anthem's request to block Cigna from terminating the merger.
Cigna in February filed a lawsuit against Anthem seeking to unilaterally terminate their proposed merger, after a federal judge ruled against the merger over anti-competitive concerns, effectively blocking it from taking effect.
In response, Anthem countersued to block Cigna from terminating the deal. Anthem also appealed the federal judge's ruling to block the proposed merger, which last month was upheld by a three-judge panel of the U.S. Court of Appeals for the District of Columbia. Anthem on Monday said it planned to petition the Supreme Court to hear the case because it believes the proposed merger would result in significant cost savings.
The proposed merger between Anthem and Cigna would make the combined company the nation's largest insurer by enrollment.
During the hearing, Judge Travis Laster of Delaware's Court of Chancery said it was "incredibly unlikely" that Anthem would be able to close the deal. During the hearing he said, "I recognize that this ruling will permit Cigna to terminate the merger and effectively end Anthem's path to closing."
However, he also said there was evidence that Cigna may have violated the merger agreement by refusing to help mitigate antitrust concerns, which could entitle Anthem to "potentially massive damages."
Under the merger agreement, Anthem would have to pay Cigna a $1.85 billion breakup fee if the deal does not go through.
In a statement Thursday, Cigna said, "We look forward to closing this final chapter."
Anthem terminates agreement
In a statement Friday, Anthem said it "has delivered to Cigna a notice terminating the merger agreement."
Anthem also accused Cigna "repeatedly" breaking the merger agreement, adding, "[Cigna's] successful sabotage of the transaction has caused Anthem to suffer massive damages, claims which Anthem intends to vigorously pursue against Cigna" (Feeley et al., Bloomberg, 5/11; Hals/Bartz, Reuters, 5/11; Livingston, Modern Healthcare, 5/11; Reuters, 5/11; Livingston, Anthem release, 5/12; Mulero, Reuters, 5/11; Livingston, Healthcare Dive, 5/12).
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