Connecticut-based Cigna Corp. (NYSE: CI) says it has terminated the proposed $54 billion merger with Indianapolis-based Anthem Inc. (NYSE: ANTM) after the deal was blocked by a U.S. District Court judge. As a result, Cigna has filed a nearly $15 billion lawsuit against Anthem. In response to Cigna’s suit, Anthem is asking for a temporary restraining order to stop Cigna from terminating the merger agreement, arguing there is "still sufficient time and a viable path forward potentially to complete the transaction."
Cigna’s lawsuit, filed in the Delaware Court of Chancery, calls for Anthem to pay the $1.85 billion reverse termination fee laid out in the merger agreement as well as damages of more than $13 billion. Cigna says the damages include "the amount of premium that Cigna shareholders did not realize as a result of the failed merger process."
"This action is necessary to enforce and preserve Cigna’s rights and protect the interests of its shareholders," Cigna said in a news release Tuesday. "The company believes strongly in the merits of its case and hopes that this matter is rapidly resolved."
Anthem immediately provided the following statement to Inside INdiana Business in response to Cigna’s announcement:
On January 18, 2017, Anthem extended its Merger Agreement with Cigna through April 30, 2017. Under the terms of the Merger Agreement, Cigna does not have a right to terminate the agreement. Therefore, Cigna’s purported termination of the Merger Agreement is invalid. Anthem will continue to enforce its rights under the Merger Agreement and remains committed to closing the transaction.
Wednesday morning, Anthem announced its lawsuit, filed in the same court, which seeks the temporary restraining order and unspecified damages. In a news release, Anthem said, "Cigna’s lawsuit and purported termination is the next step in 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."
Anthem also spelled out what it says are its efforts to obtain regulatory clearance for the merger and "Cigna’s matching efforts to sabotage that goal." You can view the list of "integration efforts" by clicking here.
Last year, the U.S. Department of Justice filed a civil antitrust lawsuit in an effort to block the proposed merger, saying the move would reduce competition. U.S. District Court for the District of Columbia Judge Amy Berman Jackson agreed and blocked the deal last week.