Anthem Says Cigna Deal at Risk Without Quick Merger Ruling

  • Cigna won’t extend merger agreement, Anthem tells judge
  • Aetna, Anthem jockey over trial schedule in U.S. merger suits

Anthem Inc. said its planned takeover of Cigna Corp. is in danger of collapsing unless there’s a quick trial to resolve a U.S. lawsuit seeking to block the deal.

Anthem’s lawyer, Christopher Curran, told U.S. District Judge John Bates in Washington on Thursday that the insurer needs a ruling on the $48 billion merger by the end of this year. There is "contentiousness" with Cigna, he said, and its rival won’t extend their agreement past the April 30 termination date.

Cigna’s top management is "no longer interested in being pursued," Curran said. "Speed is essential."

Matthew Asensio, a spokesman for Cigna, declined to comment on the litigation.

Anthem and Aetna Inc., whose agreement to buy Humana Inc. is also being challenged by the Justice Department, urged Bates to reject the government’s proposal that the cases be tried next year, arguing that’ll be too late. Aetna’s lawyer suggested the challenge to its $37 billion deal for Humana be heard in October or November. 

Bates said he couldn’t on his own decide both cases by the end of the year and indicated one would need to be reassigned to another judge, without specifying which case. He said he would schedule a trial sooner than the government’s proposal of February in the case he took.

"If we could extend the dates, we would," Curran said. "We can’t so we’re stuck." Cigna’s lawyer said he’d defer to Anthem and didn’t make further comments to the judge.

Cigna Jumps

Cigna’s shares jumped almost 3 percent to $128.28 in New York, while Humana increased 0.2 percent to $173.83. Aetna fell 0.2 percent, and Anthem declined 0.8 percent.

The Justice Department in July sued the four companies to block their mergers, saying the tie-ups will hurt consumers by increasing prices and reducing competition. The government urged the judge to ignore the merger deadlines in setting trial dates.

The companies dispute U.S. assertions their planned mergers will result in public harm, contending lawyers for the U.S. are mistaken about their market definitions. If they prevail, it will reduce the number of national carriers from five to three, including market leader UnitedHealth Group Inc.

Lawsuits Response

Humana and Aetna responded to the lawsuits promising to “vigorously” fight to complete their deal. Anthem said the Justice Department’s suit is “flawed,” while Cigna said it would review its options under its agreement with Anthem.

New York’s insurance regulator sent a letter on Wednesday to Anthem saying it’ll hold a hearing on the Cigna acquisition, before deciding whether to approve the deal. The regulator said it was concerned the deal could hurt competition in the state’s market for commercial health insurance coverage. New York approved Aetna’s acquisition of Humana without a hearing.

The cases are U.S. v. Anthem Inc., 16-cv-1493, and U.S. v. Aetna Inc., 14-cv-1494, U.S. District Court, District of Columbia (Washington).

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