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Cigna, Anthem Damage Claims Rejected After Merger Failed

A Delaware judge rejected damage claims from Cigna and Anthem against each other in the wake of their failed merger.
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Neither Cigna  (CI) - Get Cigna Corporation Report nor Anthem  (ANTM) - Get Anthem, Inc. Report won damages from the other in the wake of the collapse of the $47 billion merger the two insurers agreed to in 2015.

A Delaware judge Monday rejected the $15 billion of damages and termination fees sought by Cigna, which Anthem was to purchase.

The judge also denied Anthem’s claim for $21 billion, which stemmed from its belief that Cigna purposely tanked the deal by not contesting the Justice Department’s challenge to the merger.

Chancery Court Judge Travis Laster said that Cigna failed to meet its obligations, but that the government likely would have prevented the deal anyway on antitrust grounds, Bloomberg reports.

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“This outcome leaves the parties where they stand,” Laster wrote in his ruling. “Neither side can recover from the other. Each must deal independently with the consequences of their costly and ill-fated attempt to merge.”

Anthem recently traded at $283.21, up 2.1%. The shares have slipped 6% so far this year. Cigna recently traded at $179.88, down 0.7%. The stock has fallen 12% in 2020 to date.

Morningstar analyst Julie Utterback is enthusiastic about Anthem.

“It continues to capitalize on its enviable position as the exclusive licensee of the Blue Cross Blue Shield brand in 14 states,” she wrote in a commentary earlier this month.

“We would argue that the Blue Cross Blue Shield brand is the most recognizable and trusted franchise in the U.S. health insurance industry. As the largest Blue Cross Blue Shield operator, Anthem claims the second position by medical membership in the U.S., behind only UnitedHealth.”  (UNH) - Get UnitedHealth Group Incorporated Report