Cigna Files Suit Against Former Merger Partner Anthem

Aetna Humana call off merger

USA health insurance giant Aetna Tuesday abandoned its planned $37 billion merger with industry rival Humana after the companies decided not to appeal a federal judge's ruling that blocked the acquisition on antitrust grounds.

Anthem and Cigna, the nation's second- and third-largest health insurers, suffered a similar federal court ruling last week when a judge blocked their $48 billion deal on antitrust grounds. The two healthcare companies said that the decision comes after a ruling from the United States District Court for the District of Columbia granting a United States Department of Justice request to enjoin the merger. Unlike Anthem, Aetna said on Tuesday it is abandoning its efforts to merge and will pay Humana a $1 billion breakup fee.

A representative for Cigna wasn't immediately reachable for comment.

But the Department of Justice had sued last summer to stop the deals, due to concerns about how they may affect prices and consumer choices.

Cigna said on Wednesday that it believed Anthem's allegations were meritless.

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The report said there was nothing more to report, however, about a possible meeting such as when and where it would take place.

It also filed a lawsuit in DE, asking a judge to declare legal its decision to terminate the deal and to approve $13 billion in damages for shareholders who did not receive the takeover premium.

Anthem said Thursday it will appeal the federal court decision blocking its proposed Cigna purchase.

Though the companies gave in to the court's decision, management of Anthem and Aetna plan to appeal against it. "These additional damages include the amount of premium that Cigna shareholders did not realize as a result of the failed merger process", the statement goes on. Both acquisitions came together amid an insurance-industry merger frenzy in 2015, but the dynamics in each have been different.

With Cigna prevented from terminating the deal, Anthem is free to pursue an appeal in federal court in Washington that seeks to overturn a February 8 order that the merger of the two insurers would threaten competition and should be stopped. Aetna was up about 2 percent. Except to the extent otherwise required by federal securities law, neither Anthem nor Cigna undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or the receipt of new information.

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