Anthem announced Friday that it would no longer pursue its merger with Cigna.
“Cigna has failed to perform and comply in all material respects with its contractual obligations,” Anthem said in a press release. “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.”
On Thursday, a Delaware court denied Anthem’s request for a preliminary junction. The judge had stayed the implementation until today, allowing Anthem an opportunity to take its case to the Delaware Supreme Court.
Earlier in the week, Anthem lawyers argued that Cigna executives were passively trying to get out of the agreement by refusing to help with a plan to win antitrust approval. Despite refusing to grant the injunction, Judge Travis Lester said Anthem could seek “potentially massive damages” for Cigna’s failure to act in good faith and help close the deal.
Anthem and Cigna are likely to continue to fight over a $1.85 billion fee that Anthem would owe Cigna.
Our Take: We sent the news to one of our valued clients, to which we received the reply: “What took so long?”
We predicted the demise of this merger back in December, and our belief was grounded in the acrimony between Anthem—the nation’s second-largest payer—and Cigna executives. We don’t know what started it all, but once the finger-pointing became public, it became a fait accompli before they stepped foot in a courtroom.