(Adds Cigna comment)
NEW YORK May 12 Anthem Inc on Friday
called off a $54 billion deal to buy Cigna Corp, one day
after the second-largest U.S. health insurer lost a Delaware
business court ruling that could have kept alive the chances of
The fight over a $1.85 billion merger break-up fee will go
on as Anthem insists that it will not pay, and Cigna claims it
is owed more than that amount, including damages.
Anthem and Cigna have been in legal disputes since the U.S.
Justice Department won its case to block the merger that would
have created the largest U.S. health insurer.
Cigna, ranked No. 5 in the industry, was suing in Delaware
to terminate the merger while Anthem pursued appeals of the
antitrust decision. Court documents show the companies were at
odds even before the government decision.
"Cigna's repeated willful breaches of the merger agreement
and its successful sabotage of the transaction has caused Anthem
to suffer massive damages," Anthem said in a statement.
Cigna said it was seeking prompt payment of the termination
fee and that it would pursue its claims for additional damages.
Cigna said it would also immediately increase its share buyback
"Not a surprise that this failed marriage is ending in
litigation," JP Morgan analyst Gary Taylor wrote in a research
report. The key question, he said, is if Cigna would consider
moving forward on a new deal with another insurer before
resolving new termination-fee related litigation.
Anthem and Cigna announced the deal in July 2015. About a
year later, the Justice Department sued to block that and a
merger between Aetna Inc and Humana Inc.
Anthem shares fell 0.7 percent, or $1.28, to close at
$181.44. Cigna was off 1.1 percent, or $1.84, at $161.98.
(Reporting by Caroline Humer; editing by Dan Grebler and