Appeals Court Ruling Puts Anthem Merger in Jeopardy
Anthem ranked highest among Indiana companies on the 2016 Fortune 500 list.
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThe U.S. Court of Appeals for the District of Columbia has dealt a serious blow to Indianapolis-based Anthem Inc.’s (NYSE: ANTM) planned $54 billion merger with Connecticut-based Cigna Corp. (NYSE: CI). In a decision that sides with a previous ruling by a lower court, the appeals court judges agreed with the U.S. Department of Justice that the deal would reduce market competition.
In a filing with the U.S. Securities and Exchange Commission, Cigna says:
As previously disclosed, on February 8, 2017, the U.S. District Court (the "District Court") for the District of Columbia enjoined the proposed merger between Cigna Corporation and Anthem, Inc. On April 28, 2017, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the decision of the District Court.
In addition, Cigna continues to work through the litigation process in the pending Delaware Court of Chancery matter involving Cigna and Anthem, including the preliminary injunction hearing scheduled for May 8, 2017.
Details of the lawsuits tied up in Delaware courts include Cigna’s call for Anthem to pay a $1.85 billion reverse termination fee that was included in the merger agreement. It is also seeking damages exceeding $13 billion. For its part, Anthem countered with a temporary restraining order and damages that were not specified for "Cigna’s campaign to sabotage the merger and to try to deflect attention from its repeated willful breaches of the Merger Agreement in support of such effort."
A spokeswoman with Anthem did not immediately return a request for comment from Inside INdiana Business.