A Delaware judge’s ruling that neither Cigna nor Anthem can collect damages in a battle over who sabotaged their mega-merger years ago means no breakup fees or billion-dollar payout for either health plan.
Cigna was perceived by most as the potential big winner given the health insurer had been seeking more than $13 billion in damages and a $1.85 billion breakup fee from Anthem for “harm” Cigna says the operator of Blue Cross and Blue Shield health plans caused the insurer and its shareholders.
The lawsuit arose in 2017 after Anthem refused to pay a breakup fee to Cigna after its aborted $48 billion merger with the nation’s second-largest health insurer, triggering a legal back and forth of suits and counter suits that may finally be over.
“In this corporate soap opera, the members of executive teams at Anthem and Cigna played themselves,” Vice Chancellor J. Travis Laster wrote in his opinion handed down Monday in Delaware State Chancery Court. “Cigna failed to prove that Anthem breached its obligations under the Efforts Covenants, and Cigna failed to prove that it is entitled to the Reverse Termination Fee. Each party must bear the losses it suffered as a result of their star-crossed venture.”
DistilINFO Healthplan Market Intelligence Report
Your monthly roundup of the US healthplan industry.
Though both sides lost time and money on the legal battle, they saw positives in the ruling.
“We are satisfied with the decision determining that Cigna breached its obligation to use best efforts to obtain regulatory approval for the merger, thereby eliminating its right to a $1.85 billion termination fee,” Anthem said Tuesday. “We believe this decision is in the best interests of Anthem and our stakeholders.”
Cigna Tuesday said it’s not ruling out an appeal.
“We are pleased that the Court agreed with us that Cigna did not cause the merger to fail,” Cigna said in a statement Tuesday. “We continue to strongly believe in the merits of our case, and we are evaluating our options with respect to appeal. Today, Cigna and Express Scripts are a powerful combination as we collectively harness our deep capabilities, innovative solutions and partnership orientation to transform health care making it more affordable, simple and predictable for those we serve.”