Ruling on Anthem-Cigna Merger Unlikely in 2016, Judge Says
August 12 2016 - 01:20PM
Dow Jones News
By Brent Kendall
WASHINGTON -- A federal judge said Friday she wouldn't be able
to rule by the end of 2016 on the legality of Anthem Inc.'s
proposed acquisition of Cigna Corp., a setback for Anthem's efforts
to hold the deal together.
The Justice Department sued last month on antitrust grounds to
block the proposed Anthem-Cigna deal, as well as a second major
health-insurance merger that would combine Aetna Inc. and Humana
Inc.
U.S. District Judge Amy Berman Jackson, who is presiding over
the Anthem matter, said during a scheduling hearing Friday that
Anthem's proposed timeline for a trial was too fast, while a more
extended schedule requested by the Justice Department was too slow.
She said she was aiming to rule by the end of January.
Anthem had requested that a trial be concluded in time for the
judge to rule this year, expressing worry that Cigna will back out
of the transaction at the first opportunity. Anthem can extend its
merger agreement with Cigna to April 30, 2017, but after that Cigna
can walk away and seek a $1.85 billion breakup fee.
Anthem argued that the faster schedule was necessary because it
would need at least 120 days after a court ruling to secure
regulatory approvals from state insurance regulators.
Judge Jackson didn't set a firm trial schedule at the hearing
but said she would do so soon.
The judge on multiple occasions noted the continuing tensions
between Anthem and Cigna and said it was a "bizarre situation" that
the court, and other relevant parties, were being asked to move so
quickly in the case "for the benefit of a merger that may not be
desired" by Cigna.
Cigna lawyer Charles Rule said the company remained committed to
the merger agreement and to litigating the case, but he didn't
commit to giving Anthem or the court additional time. Mr. Rule said
he couldn't say what Cigna's board would do on April 30.
Anthem lawyer Christopher Curran said the company would commit
to doing everything it could to move the case along as quickly as
possible.
Mr. Curran reiterated Anthem's belief that Cigna will walk away
if given the opportunity. He said Cigna for now has to say it
remains committed to the deal in order not to jeopardize its
potential collection of the merger breakup fee.
The Justice Department argues the merger would harm consumers,
employers and health-care providers with an unacceptable reduction
in competition. Anthem disagrees, saying the deal will benefit the
public.
Write to Brent Kendall at brent.kendall@wsj.com
(END) Dow Jones Newswires
August 12, 2016 13:05 ET (17:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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