A Delaware judge rebuffed efforts by both
Cigna, which would have been acquired by Anthem, had demanded about $15 billion in damages and termination fees. Anthem, which runs Blue Cross and Blue Shield plans in more than a dozen states, had insisted it was owed $21 billion because, it claimed, Cigna intentionally sank the deal by failing to challenge Justice Department opposition.
“Despite high-profile protagonists, a sprawling record, and billions of dollars in damages claims, this is a breach of contract case,” Chancery Court Judge
“This outcome leaves the parties where they stand,” Laster wrote in Monday’s opinion. “Neither side can recover from the other. Each must deal independently with the consequences of their costly and ill-fated attempt to merge.”
The ruling is more favorable for Anthem because “it removes some overhang around a potential hefty break-up fee payment,” Citi analyst
The case provided an inside look at one of the largest corporate deals in U.S. history to go sour and a courtroom version of the blame game. It featured competing narratives about how the transaction, which would have created the largest American health insurer by membership, wound up on the rocks.
Anthem offered to buy Cigna in a 2015 cash-and-stock deal to bulk up and gain negotiating power to lower reimbursement rates to health-care providers. The
A year later, a federal judge in Washington backed the government’s position and an appeals court upheld that ruling. Anthem asked Laster to keep the deal alive while it appealed to the U.S. Supreme Court, but the state court judge refused.
(Updates with Citi note in sixth paragraph.)
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