Anthem, Inc. is expected to fight paying a break-up fee over a failed merger with Cigna.
A Delware Chancery Court ruling sided with Cigna in denying Anthem a temporary injunction as it continued to press for the merger. Anthem did not appeal the decision and will instead seek damages.
The case is expected to play out in Chancery Court.
Cigna has operations in Delaware. An Anthem research subsidiary, HealthCore is based in Wilmington.
The merge effort, which dates back to 2015, faced antitrust challenges and unfavorable court rulings.
“In light of yesterday’s decision and Cigna’s refusal to support the merger, however, Anthem has delivered to Cigna a notice terminating the Merger Agreement. Cigna has failed to perform and comply in all material respects with its contractual obligations. As a result, Cigna is not entitled to a termination fee. On the contrary, Cigna’s repeated willful breaches of the Merger Agreement and its successful sabotage of the transaction has caused Anthem to suffer massive damages, claims which Anthem intends to vigorously pursue against Cigna.”
According to Cigna, Anthem was required under the merger agreement to lead the regulatory approval process and to use its reasonable best efforts to obtain regulatory approval.
“As Cigna has stated, it believes that Anthem willfully breached those obligations and as a result the transaction did not receive the requisite regulatory approvals. Cigna seeks prompt payment of the $1.85 billion reverse termination fee and will pursue our claims for additional damages of over $13 billion against Anthem for the harm that it caused Cigna and its shareholders,” Cigna stated.
Cigna plans to buy back its stock, due to the termination of the transaction.