May 11, 2017
Bloomberg
-
Anthem sought order barring exit for 60 days to save the deal
-
Federal courts have found merger riddled with antitrust issues
Cigna Corp. can walk away from its $48 billion merger with Anthem Inc., a Delaware judge ruled almost three months after another court blocked the deal as anticompetitive.
The ruling on Thursday means Anthem could be on the hook for $1.85 billion in breakup fees and $13 billion in damages to Cigna, which had argued that its would-be partner was too stubborn to see that the concerns about competition were insurmountable.Delaware Chancery Judge Travis Laster said Anthem didn’t deserve a 60-day extension to an earlier order barring Cigna’s exit because it was “incredibly unlikely,” the company could close the deal. However, the judge said there was significant evidence Cigna may have violated the merger agreement by dragging its feet on antitrust concerns, which could entitle Anthem to “potentially massive damages.”
“The reality is both parties probably have some risk and they’ll bargain for something between zero and $1.85 billion,” said Matt Cantor, an antitrust lawyer at Constantine Cannon.
Laster’s decision may be the final dagger to a deal that has been as notable for the bad blood between the two insurers as its antitrust roadblocks. Anthem is asking the U.S. Supreme Court to overturn rulings finding the deal flawed by antitrust problems, and the court is unlikely to weigh in now that Cigna has been allowed to walk.