INDIANAPOLIS - Indianapolis-based Anthem Inc. (NYSE: ANTM) has alerted Cigna Corp. (NYSE: CI) that it is terminating a proposed $54 billion merger. The combination would have created the largest insurance company in the country. The announcement comes after the Delaware Court of Chancery denied Anthem's motion to overturn previous court decisions to halt the merger. Anthem says Cigna was successful in the deal's "sabotage" and says the Connecticut-based company should not receive a termination fee.

In a statement, Anthem says:

Cigna has failed to perform and comply in all material respects with its contractual obligations. As a result, Cigna is not entitled to a termination fee. On the contrary, Cigna’s repeated willful breaches of the Merger Agreement and its successful sabotage of the transaction has caused Anthem to suffer massive damages, claims which Anthem intends to vigorously pursue against Cigna.

Cigna says it plans to fight for a $1.85 billion reverse termination fee it says it is owed by Anthem.

Cigna filed a lawsuit in February against Anthem, demanding an end to the merger agreement and seeking damages totaling $13 billion.

Multiple court decisions and the U.S. Department of Justice have contended that the deal would hurt insurance market competition, something Anthem still argues against, saying "Anthem believed this acquisition was a truly compelling opportunity to positively impact the health and well-being of its members, and to expand access to high quality affordable health care for consumers."

In a filing with the U.S. Securities and Exchange Commission Thursday, Cigna said Anthem had until noon Friday to decide whether to appeal the ruling in Delaware. Earlier this month, Anthem filed a petition to have the U.S. Supreme Court to step in and get the proposed merger back on track.

Anthem says it will return its focus to "delivering superior health care services to our more than 40 million members with greater value at less cost."