CIGNA Corporation ($CI) announced that it has terminated its merger agreement with Anthem. The health insurer had $48 billion acquisition offer from Anthem. On February 8th, the U.S. District Court for the District of Columbia granted the U.S. Department of Justice’s request to block Anthem’s acquisition of Cigna.
The Anthem Chairman, President and CEO Joseph R. Swedish had said, “combining Anthem and Cigna would positively impact the health and well-being of millions of Americans - saving them more than $2 billion in medical costs annually.” The company had said that it was disappointed by the decision.
Cigna has now decided to sue Anthem for nearly $13 billion. It has also demanded a previously disclosed breakup fee, which is believed to be $1.85 billion. Cigna said, “These additional damages include the amount of premium that Cigna shareholders did not realize as a result of the failed merger process.”
The company stock is up nearly 10 percent this year so far. In the past 12 months, it has gained over 12 percent. Anthem has said that it plans to file an appeal against the ruling blocking the merger. Cigna is expected to look for new suitors. CIGNA CEO David Cordani said that the company will not keep its capital idle for a long period of time.