Anthem Finally Walks Away From Cigna Merger, Seeks Charges
Zacks Investment Research | May 14, 2017 10:01PM ET
Anthem Inc. (NYSE:ANTM) has officially terminated its merger with Cigna Corp. (NYSE:CI) . This development came after the Delaware Chancery Judge refused Anthem’s request last week to hold back Cigna for another 60 days.
In January, Anthem postponed the merger date to April end to buy time. The company had hopes of the merger materializing under the Trump administration and planned to seek a quick appeal of the court decision that blocked it.
In February, Cigna filed a suit in Delaware Chancery Court asking to be freed from the deal and sought $1.85 billion of termination fee and $13 billion in other charges.
There was always a friction between the companies, with each blaming the other for the deal breakup. The fight has now reached a stage where the focus is on the breakup fee.
Anthem and Cigna were already in a rough patch. Since the very beginning, Anthem continued its pursuit of Cigna by creating pressure on its board members despite the latter’s repeated rejection of the takeover proposal.
Anthem was also ready to go public with its proposal offer if Cigna did not give consent to the deal. With time, the differences between the two companies have broadened and now the fight is in the open.
Since the announcement of the merger, shares of both Anthem and Cigna have underperformed the Zacks categorized
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