Delaware Judge Frees Cigna to Exit Anthem Merger -- Update
May 11 2017 - 06:16PM
Dow Jones News
By Brent Kendall, Anna Wilde Mathews and Peg Brickley
A Delaware judge here on Thursday freed health insurer Cigna
Corp. to abandon its proposed $48 billion merger with Anthem Inc.,
declining to give Anthem more time to try to salvage the deal,
which federal courts have blocked on antitrust grounds.
The development could spell the end for a long-troubled deal in
which the two companies have accused one another of violating their
merger agreement.
The Justice Department filed an antitrust lawsuit against the
deal last year. A federal judge blocked it in February and an
appeals court also ruled against Anthem last month. But Anthem
sought to press forward and recently asked the U.S. Supreme Court
to intervene, a request that faced long odds.
Separate from the federal antitrust case, Anthem and Cigna have
sued one another in Delaware, and Anthem wanted Vice Chancellor J.
Travis Laster, a judge on the Delaware Chancery Court, to issue an
injunction that would have prevented Cigna from terminating the
deal, at least for now.
Judge Laster in a Thursday afternoon hearing denied Anthem's
injunction request, saying the company's chances of saving the
merger were remote.
Anthem and Cigna didn't immediately respond to requests for
comment.
The judge stayed the ruling for 24 hours so Anthem can seek
appellate review if it wishes.
During a lengthy court hearing on Monday, Anthem had argued to
Judge Laster that Cigna had sabotaged the deal and shouldn't be
able to kill the transaction while Anthem made one more push to
save it.
Anthem said it had a realistic shot at overcoming antitrust
hurdles, either through its Supreme Court appeal or perhaps through
negotiations with Trump administration antitrust officials taking
the reins at the Justice Department.
Cigna, for its part, had said the deal had no realistic legal
path forward after federal court rulings found the merger would
unlawfully suppress competition. And it disputed Anthem's
allegations of sabotage.
While Cigna prevailed Thursday with the denial of injunction,
Judge Laster made comments that could hurt the company down the
line. He said Anthem may have a strong case that Cigna didn't live
up to its contractual commitment to give its best efforts to fight
for the deal.
The judge said Anthem at some point may have a chance to collect
a large monetary damages award against Cigna.
"Money can't fix everything, but it can help a lot," the judge
said in court. "At this point, in my view, a damages award is the
only realistic form of relief."
Write to Brent Kendall at brent.kendall@wsj.com, Anna Wilde
Mathews at anna.mathews@wsj.com and Peg Brickley at
peg.brickley@wsj.com
(END) Dow Jones Newswires
May 11, 2017 18:01 ET (22:01 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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