Cigna re­jects An­them’s latest merger pro­posal, say­ing deal is ‘in­ad­e­quate’

The China Post - - WORLD BUSINESS -

Cigna said Sun­day it had re­jected a multi­bil­lion-U.S.-dol­lar buy­out deal from ri­val health care gi­ant An­them, say­ing it was “deeply dis­ap­pointed” in the group’s ac­tions.

The board was unan­i­mous in its de­ci­sion, call­ing the of­fer “in­ad­e­quate” in a let­ter to An­them, which had es­ti­mated the deal at US$53.8 bil­lion in­clud­ing debt when it made it public Satur­day.

Cigna had pre­vi­ously re­jected an of­fer ex­ceed­ing US$45 bil­lion from An­them.

“We are deeply dis­ap­pointed with your re­cent ac­tions,” the let­ter read.

“A com­bi­na­tion in­volv­ing An­them and Cigna un­der the right cir­cum­stances has the po­ten­tial to bring to­gether our com­ple­men­tary strengths in a man­ner that would pro­vide sub­stan­tial ben­e­fits to both con­sumers of health care ser­vices and health care pro­fes­sion­als, while de­liv­er­ing im­me­di­ate and sus­tain­able eco­nomic re­turns to share­hold­ers.”

It also listed “a num­ber of ma­jor is­sues,” in­clud­ing An­them’s lack of a growth strat­egy, com­pli­ca­tions due to An­them’s mem­ber­ship in the Blue Cross Blue Shield as­so­ci­a­tion and a data breach the group ex­pe­ri­enced in Fe­bru­ary.

The let­ter was signed by Cigna’s chair­man, Isa­iah Harris, and David Cor­dani, the pres­i­dent, chief ex­ec­u­tive and di­rec­tor.

Con­ver­sa­tions be­tween the two com­pa­nies came amid a wave of con­sol­i­da­tion through­out the health care in­dus­try in the wake of the U.S. Af­ford­able Care Act.

Mar­ket leader Unit­edHealth, with a mar­ket share in ex­cess of US$110 bil­lion, is seek­ing a merger with Aetna, which has a mar­ket cap­i­tal­iza­tion of US$42 bil­lion.

Phar­ma­ceu­ti­cal com­pa­nies and hos­pi­tals have also grown through ac­qui­si­tion as dif­fer­ent stake­hold­ers seek to bulk up to im­prove their bar­gain­ing po­si­tions with other par­ties.

An­them, the sec­ond big­gest U.S. health care com­pany af­ter Unit­edHealth Group, had rev­enues of US$73.8 bil­lion in 2014 and works as the li­censee for Blue Cross and Blue Shield plans in sev­eral U.S. states.

Cigna had 2014 rev­enues US$34.9 bil­lion.


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