Sun Sentinel Palm Beach Edition
Two giant health care firm mergers die on the table
Health insurer Cigna announced Tuesday that it will unilaterally terminate its $54 billion merger agreement with Anthem after the deal was rejected by a federal judge. The news came shortly after insurance giants Aetna and Humana announced a mutual decision to abandon their $37 billion merger agreement.
An Anthem spokeswoman said the company is still committed to closing its deal with Cigna, signaling the breakup could be messy. In a press release, Cigna announced it had filed a lawsuit in Delaware Chancery Court against Anthem seeking a judgment that the merger agreement had been terminated lawfully and seeking a $1.85 billion termination fee, along with an additional $13 billion in damages.
“These additional damages include the amount of premium that Cigna shareholders did not realize as a result of the failed merger process,” the company said. “The company believes strongly in the merits of its case and hopes that this matter is rapidly resolved.”
Anthem spokeswoman Jill Becher said that Cigna’s action was invalid and said the company “does not have a right to terminate the agreement.”
“Anthem will continue to enforce its rights under the merger agreement,” Becher wrote.
The dissolution of the Aetna-Humana deal is proceeding more smoothly. Last month, a federal judge upheld the Justice Department’s decision to block that deal. Aetna will pay Humana a $1 billion breakup fee, the companies said, which will amount to about $630 million after taxes.