The Big Five remains, as the Big Three vanishes. Two would-be mergers of huge health insurance companies that would have changed the market by turning the Big Five health plans into the Big Three were called off today. The Justice Department challenged both deals—Aetna’s attempt to buy Humana, and a planned merger between Cigna and Anthem—on the grounds that they violated antitrust law.
Aetna and Humana officials issued separate statements this morning that they would not challenge the court’s ruling blocking their $34 billion merger.
This afternoon Cigna said it was ending its $48 billion merger agreement with Anthem, according to the Wall Street Journal. What had been an acrimonious possible pairing ended in yet more acrimony as Cigna said it will seek a $1.85 billion breakup fee plus $13 billion in damages from Anthem.
The two companies openly quarreled in court, accusing each other of violating the terms of their proposed merger, and that’s one of the issues the government brought up in filing an antitrust lawsuit. At one point, Anthem executives tried to move forward unilaterally since Cigna ceased cooperating with them on various deal-related issues. This stumped presiding Federal District Judge Amy Berman Jackson. “How do you work on integration without talking to the person you’re integrating with?” she asked.
Meanwhile, Cigna officials were always uneasy about Anthem’s post-merger plans for the company that would be created in the merger.
Source: Wall Street Journal