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Anthem sues Cigna to block termination of health insurer merger

[JURIST] Anthem [corporate website] filed a lawsuit [press release] on Wednesday in an attempt to block Cigna Corp [corporate website] from terminating their proposed $54 billion deal [merger agreement, PDF]. The deal in question would have created the largest membership of any US health insurer. Cigna ended the merger after a federal judge ruled against the merger [JURIST report] last week, stating it would further complicate an already concentrated market. Cigna has stated [Reuters report] that Anthem is required to pay $1.85 billion in break-ups fees and is seeking $13 billion in damages for its shareholders who did not receive the takeover premium. Anthem has stated that the actions by Cigna are a clear attempt at merger sabotage [Forbes report] and that nothing is owed to Cigna who repeatedly breached the Merger Agreement in an attempt to sabotage the deal. Anthem and Cigna both filed suits in the Delaware Chancery Court, and Anthem is seeking an appeal from the previous District Court ruling blocking the merger. Anthem hopes to get an extension for the merger agreement and a temporary restraining order against Cigna.

Mergers between Health Insurance companies have come under fire in recent months. The Department of Justice sued to halt the merger between Anthem and Cigna in July on the grounds that the acquisition would "substantially lessen" [press release] the competition in the health insurance market. In the same month the DOJ also released a decision [complaint, PDF] that a merger between Aetna and Human would inhibit competition and hurt consumers. The lawsuit resulted in the merger being blocked [JURIST report] by a judge for the US District Court for the District of Columbia in January.

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