Cigna sues Anthem, wants $14 billion to break up merger deal
Anthem vows to hold Cigna to the merger agreement and says it remains committed to closing the transaction.
Cigna is suing Anthem for more than $14 billion and severing its $54 billion merger agreement despite Anthem's promise that it would fight to close the transaction.
Cigna's lawsuit seeks the $1.85 billion breakup fee stipulated in their merger contract and an additional $13 billion in damages.
[Also: Anthem, Cigna merger blocked by judge; Anthem pledges to appeal]
The additional damages sought by Cigna include the amount of premium that shareholders did not get as a result of the failed merger, Cigna said.
[Also: Cigna reports lower profit, higher revenue expectations for 2017]
Anthem said that on Jan. 18, Anthem extended its merger agreement with Cigna through April 30.
"Under the terms of the merger agreement, Cigna does not have a right to terminate the agreement," Anthem said. "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."
On Feb. 8, the United States District Court for the District of Columbia ruled in favor of the Department of Justice's request to block the merger on the grounds that the deal would decrease competition and lessen choice in the national accounts market.
Hours later, Anthem said it would appeal the decision.
"In light of the court's ruling, Cigna believes that the transaction cannot and will not achieve regulatory approval and that terminating the agreement is in the best interest of Cigna's shareholders," Cigna said in a statement Tuesday.
Cigna filed the lawsuit against Anthem in Delaware.
The suit argues Cigna has lawfully ended the merger agreement and that Anthem is not permitted to extend the termination date.
Cigna said it was disappointed in the outcome of planned merger.
The merger trial in December revealed rifts among the two insurers, unlike the apparently smooth partnership between Aetna and Humana, whose $37 billion planned consolidation was also rejected in federal court.
[Also: Aetna to pay $1 billion breakup fee to walk away from Humana merger]
Earlier on Tuesday, Aetna announced it would not pursue the deal and that it would pay Humana a $1 billion breakup fee.
Twitter: @SusanJMorse
