Executives from Indianapolis-based Anthem Inc. (NYSE: ANTM) are vowing to appeal a federal ruling that calls for breaking up a proposed $54 billion merger with Cigna Corp. (NYSE: CI). U.S. District Court for the District of Columbia Judge Amy Berman Jackson agreed with a U.S. Department of Justice suit that argued a merger of the country’s second and third-largest health insurance carriers would reduce competition. The ruling also calls into question the anticipated savings Anthem has presented.
In a statement, Anthem Chief Executive Officer Joe Swedish took issue with the court decision, saying the merger would save consumers money. In a statement, Swedish said:
Anthem is significantly disappointed by the decision as combining Anthem and Cigna would positively impact the health and well-being of millions of Americans – saving them more than $2 billion in medical costs annually. Anthem has been a leader in providing individuals with access to high quality, affordable healthcare. Our decision to acquire Cigna is grounded in our commitment to this goal and to leading our industry during this period of dynamic change. If not overturned, the consequences of the decision are far-reaching and will hurt American consumers by limiting their access to high quality affordable care, slowing the industry’s shift to value based care and improved outcomes for patients, and restricting innovation which is critical to meeting the evolving needs of healthcare consumers. Moving forward, Anthem will continue to work aggressively to complete the transaction while remaining focused on serving as America’s valued health partner, delivering superior health care services to our approximately 40 million members with greater value at less cost.
Cigna also responded:
On February 8, 2017, the U.S. District Court for the District of Columbia issued an order enjoining the proposed merger between Cigna Corporation (NYSE:CI) and Anthem, Inc. (NYSE:ANTM). Cigna intends to carefully review the opinion and evaluate its options in accordance with the merger agreement. Cigna remains focused on helping to improve health care by delivering value to our customers and clients and expanding our business around the world.
Last month, Anthem extended the termination date of the proposed deal to April 30. Initially, the merger was slated to be complete in the second half of 2016.
Anthem says more than 99 percent of shareholders from each company voted in favor of the merger, which would create the largest health insurance provider in the U.S. Anthem says its next course of action is to file a notice of appeal and request an expedited hearing to reverse the ruling and move forward with the merger.
Another mega-merger, one that would bring together Aetna and Humana, was also enjoined by a different federal judge last month.