Health insurer Cigna announced Tuesday that it will unilaterally terminate its $54 billion merger agreement with Anthem after the deal was rejected by a federal judge. The news came shortly after insurance giants Aetna and Humana announced a mutual decision to abandon their $37 billion merger agreement earlier in the day.

An Anthem spokeswoman said the company is still committed to closing its deal with Cigna, signaling the breakup could be messy. In a news release, Cigna announced it had filed a lawsuit in Delaware Chancery Court against Anthem seeking a judgment that the merger agreement had been terminated lawfully and seeking a $1.85 billion termination fee, along with an additional $13 billion in damages.
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“These additional damages include the amount of premium that Cigna shareholders did not realize as a result of the failed merger process,” the company said in its release. “The company believes strongly in the merits of its case and hopes that this matter is rapidly resolved.”

Anthem spokeswoman Jill Becher said that Cigna’s action was invalid and said the company “does not have a right to terminate the agreement.”

“Anthem will continue to enforce its rights under the merger agreement,” Becher wrote.

The dissolution of the Aetna-Humana is proceeding more smoothly. Last month, a federal judge upheld the Justice Department’s decision to block that deal. Aetna will pay Humana a $1 billion breakup fee, the companies said, which will amount to about $630 million after taxes. Humana will update its financial outlook for the coming year this afternoon.

“While we continue to believe that a combined company would create greater value for health care consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction,” Aetna chief executive Mark Bertolini said in a statement. “We are disappointed to take this course of action after 19 months of planning, but both companies need to move forward with their respective strategies in order to continue to meet member expectations.”

Thomas Noland, a spokesman for Humana, said in an email that the company had always known that the deal might not go through.

“We have therefore planned carefully for it, and are fully prepared to continue to go forward as an independent company,” Noland said.

The two mergers were first proposed in 2015 and could have reshaped the health insurance landscape in the United States by consolidating the four of the largest insurers into two companies. Both deals were blocked by the Justice Department on antitrust grounds, and two different federal judges upheld those decisions in the last few weeks.

U.S. District Judge Amy Berman Jackson said the Anthem-Cigna deal would raise prices and eliminate competition between the two insurers for large national accounts — employers buying health plans for more than 5,000 employees.

U.S. District Judge John Bates said the Aetna-Humana deal would have been anticompetitive and raised prices for consumers, specifically in the business of selling private Medicare plans in hundreds of counties and in the health insurance exchanges set up by the Affordable Care Act in three counties in Florida.

The formal conclusion of the Aetna-Humana deal did not come as a surprise; analysts had expected that Aetna and Humana would not appeal the decision.

Scott Fidel, an analyst at Credit Suisse, wrote in a research note that after a trip to Aetna last week, “we came away from the meeting viewing the likelihood of an appeal of Judge Bates’ adverse ruling as extremely low, as management conceded that an appeal would likely face a very high hurdle to success.” Ana Gupte, an analyst with Leerink Partners wrote the deal was viewed “as completely dead at this point” in a note last week.

Analysts have speculated that Humana, which is strong in the Medicare Advantage business of selling private Medicare plans, could now be targeted in a future deal, by either Anthem or Cigna.</s>Cigna says it is rejecting Anthem's proposed $48 billion acquisition bid and suing the Blue Cross-Blue Shield insurer.

The announcement comes hours after another major insurer, Aetna, said it was abandoning its planned $34 billion purchase of Medicare Advantage provider Humana.

The Department of Justice sued last summer to stop the deals due to concerns about how they would affect prices and consumer choices. Federal judges rejected both deals in separate rulings earlier this year.

Anthem Inc. had filed paperwork Monday to appeal its case.

Cigna Corp. says it is seeking a $1.85 billion termination fee from Anthem and more than $13 billion in damages caused by what it says were Anthem's breaches of the merger agreement.

An Anthem spokeswoman did not immediately return a call seeking comment.</s>Health insurer Cigna said Tuesday it filed suit against Anthem claiming billions of dollars in breakup fees and damages after a federal court blocked their proposed merger on antitrust concerns.

Cigna said it filed suit against Anthem demanding a $1.85 billion breakup fee, plus more than $13 billion in additional damages following the February 8 US court decision blocking the proposed $50 billion merger.

Anthem rejected the claim, calling Cigna's "purported" termination of the deal "invalid."

The back-and-forth came hours after two other insurers, Aetna and Humana, formally abandoned their own merger plan following a similarly unfavorable antitrust ruling last month.

Both proposed mergers were blocked by federal judges, who agreed with Justice Department antitrust regulators that reducing the number of major US insurers from five to three could harm consumers.

The judicial crackdown comes as Congress moves to revise former president Barack Obama's Affordable Car Act, known as Obamacare, partly due to concerns about the lack of choice for consumers seeking health insurance plans.

Cigna said it was disappointed in the outcome, but that it had met its obligations under its agreement with Anthem.

"Anthem contracted for and assumed full responsibility to lead the federal and state regulatory approval process, as well as the litigation strategy, under the merger agreement," Cigna said in a press release.

"Cigna fulfilled all of its contractual obligations and Anthem throughout the fully cooperated with approval process."

An Anthem spokeswoman said the company extended the merger agreement through April 30, meaning "Cigna does not have a right to terminate the agreement."

"Anthem will continue to enforce its rights under the Merger Agreement and remains committed to closing the transaction," Anthem said.

Earlier Tuesday, Aetna and Humana each released statements saying they mutually agreed to end their merger agreement and that Aetna would pay Humana a $1 billion breakup fee as set by the agreement.</s>Just days after a federal judge shut down a $54 billion merger between health insurers Anthem and Cigna on anti-competitive grounds, a Valentine’s Day move by Connecticut’s Cigna seeks to dump the Indianapolis-based company once and for all.

Cigna officials announced Tuesday they had sued Anthem in a Delaware court seeking a judge’s affirmation that the company had lawfully ducked out of the merger agreement, and that Anthem couldn’t extend the merger’s expiration date.

As expected, Cigna is hoping to collect from Anthem a large “breakup” fee -- a kind of corporate prenuptial agreement -- that stipulates Anthem will pay Cigna $1.8 billion if the merger doesn’t go through.

Additionally, Cigna says Indianapolis-based Anthem is on the hook for another $13 billion in damages owed to shareholders as a result of the failed deal.

Anthem lawyers call Cigna’s action’s “invalid.” They announced last week the company planned to file a speedy appeal of the federal court’s decision. In January, the companies agreed to extend the merger’s deadline until the end of April.

Two other health insurers also parted ways this week, citing irreconcilable differences. Aetna and Humana decided to part ways after a similar federal ruling shut down their planned merger.

But in sharp contrast to the Anthem-Cigna fallout, Aetna and Humana leaders announced Tuesday they were disappointed they couldn’t consummate their relationship, but thought the time had come to see other companies. Aetna has agreed to pay Humana its own billion-dollar termination fee.</s>Cigna says it is rejecting Anthem's proposed $48 billion acquisition bid and suing the Blue Cross-Blue Shield insurer.

The announcement comes hours after another major insurer, Aetna, said it was abandoning its planned $34 billion purchase of Medicare Advantage provider Humana.

The Department of Justice sued last summer to stop the deals due to concerns about how they would affect prices and consumer choices. Federal judges rejected both deals in separate rulings earlier this year.

Anthem Inc. had filed paperwork Monday to appeal its case.

Cigna Corp. says it is seeking a $1.85 billion termination fee from Anthem and more than $13 billion in damages caused by what it says were Anthem's breaches of the merger agreement.

An Anthem spokeswoman did not immediately return a call seeking comment.</s>Cigna said Tuesday in a lawsuit that it is looking to terminate its merger agreement with Anthem, and seeks a $1.85 billion break-up fee and additional damages exceeding $13 billion.

Cigna's suit comes in the wake of a federal court's decision blocking the planned $54 billion merger between the two insurers — a deal Cigna argues is effectively dead.

"In light of the Court's ruling, Cigna believes that the transaction cannot and will not achieve regulatory approval and that terminating the agreement is in the best interest of Cigna's shareholders," the Connecticut-based insurer said in a statement.

Cigna added it filed its suit in the Delaware Court of Chancery to seek a judgment that it "has lawfully terminated the merger agreement and that Anthem is not permitted to extend the termination date."

Shares of Anthem closed down slightly at $163.32, while Cigna shares edged modestly higher to close at $146.68.

Anthem is the nation's largest Blue Cross insurer, and Cigna claims that Anthem put the interests of the Blue Cross Blue Shield Association ahead of their deal, and as a result Cigna shareholders lost out during the prolonged merger process.

Anthem and Cigna's relationship has been contentious since they began having merger discussions early in 2015. During their antitrust review, attorneys from the Department of Justice introduced correspondence between the insurers accusing one another of not living up to their merger agreement.

The federal judge who ruled against the companies' merger, noted that testimony by Cigna executives during their antitrust trial was at odds with Anthem's arguments in the case, and called their clear animosity during the proceedings "the elephant in the courtroom."

In response to Cigna's suit, an Anthem spokeswoman said that their merger agreement remains in effect for another 2 ½ months.

"On January 18, 2017 Anthem extended its Merger Agreement with Cigna through April 30, 2017. Under the terms of the Merger Agreement, Cigna does not have a right to terminate the agreement," said Anthem spokeswoman Bonnie Jacobs, in a statement. "Therefore, Cigna's purported termination of the Merger Agreement is invalid. Anthem will continue to enforce its rights under the Merger Agreement and remains committed to closing the transaction."

After last week's ruling, Anthem said it would pursue an expedited appeal of the judge's decision to block the merger.

The acrimonious break-up notice from Cigna came hours after Aetna and Humana agreed to mutually terminate their $34 billion merger agreement, after their deal was also blocked in federal court. Aetna has agreed to pay Humana the $1 billion break-up fee stipulated in their agreement, saying that after 19 months of trying to gain approval it was in the best interest for the two to move on.</s>Cigna Officially Gives Up On Merger With Anthem, Sues Anthem For $13 Billion Instead

After more than a year of review and another six months in court, only to lose, it looks like health insurer Anthem’s plan to buy rival Cigna is truly dead in the water. Cigna announced today that it’s terminating the agreement to merge, but this breakup is far from mutual. Instead of simply going off their separate ways, Cigna is now suing Anthem, seeking billions in damages.

Anthem announced its intention to buy Cigna for $54 billion in July, 2015, just after Aetna and Humana announced their plans to merge.

After a year of review, however, the federal government and nine attorneys general sued to block both mergers, saying that reducing the marketplace from four national insurers to two would have enormous harms on competition.

Judges, clearly, agreed. One ruled against the Aetna/Humana deal in January, and a few weeks later that was chased by another judge blocking the Anthem/Cigna deal as well.

However, while Aetna and Humana sadly agreed to part ways earlier today, Cigna has come out swinging.

“In light of the Court’s ruling,” Cigna writes, it “believes that the transaction cannot and will not achieve regulatory approval and that terminating the agreement is in the best interest of Cigna’s shareholders.”

So far, so good; that’s how these things go. Cigna is seeking a $1.85 billion reverse termination fee from Anthem, which is par for the course when a merger fails.

However, Cigna is going further and also asking for “additional damages in an amount exceeding $13 billion.”

Why so much? Cigna isn’t looking to recoup money it lost, exactly; instead, it’s seeking to recoup potential money it never made.

“These additional damages include the amount of premium that Cigna shareholders did not realize as a result of the failed merger process. This action is necessary to enforce and preserve Cigna’s rights and protect the interests of its shareholders,” as Cigna puts it.

Cigna also expresses its disappointment that the merger failed, saying that it, “believed from the outset that the merger of the two companies had the potential to expand choice, improve affordability and quality and further accelerate value-based care.”

But don’t point the finger at us for this, the statement implies: It was Anthem that was in charge of the “full responsibility to lead the federal and state regulatory approval process, as well as the litigation strategy,” so you can feel free to blame Anthem. Cigna certainly seems to.</s>NEW YORK – Two health care mega mergers appeared to have died in one day.

Aetna and Humana said Tuesday morning that they’re calling off their $34 billion merger, and just hours later Cigna said it’s calling off its $54 billion deal with Anthem.

Both deals were targeted by the Justice Department and were recently blocked by federal judges, citing antitrust concerns.

Aetna said Tuesday it will pay Humana a $1 billion breakup fee.

Anthem will owe Cigna a $1.85 billion breakup fee, according to their agreement terms.

Cigna is also seeking damages from Anthem in an amount totaling more than $13 billion, according to a public filing filing issued Tuesday. The filing states that damages “includes the lost premium value to Cigna’s shareholders caused by Anthem’s willful breaches of the Merger Agreement.”

Anthem, however, insists the deal is not dead. The company said in a statement Tuesday that Cigna “does not have a right to terminate the agreement. Therefore, Cigna’s purported termination of the Merger Agreement is invalid.”

Cigna said in its public filing Tuesday that it “notified Anthem that it has terminated the Agreement and Plan of Merger.” Cigna also said it filed a suit against Anthem in a Delaware court to ensure Anthem is not permitted to extend the kill date of their merger agreement. Anthem claims the termination date has already been extended to April 30, 2017.

That deal has been rocked by infighting between the companies. Cigna has long hinted it was searching for a way out of the takeover.

Anthem vowed to fight the federal judge’s decision to block the deal, but Cigna said it did not intend to move forward.

When then-Attorney General Loretta Lynch sued all four companies last year to block the two mergers, she said the combinations ran the risk of “drastically constricting competition” in health care.

The two mergers would have left the health insurance industry dominated by only three giant insurers. The third company is UnitedHealth.</s>Why did this happen?

Please make sure your browser supports JavaScript and cookies and that you are not blocking them from loading. For more information you can review our Terms of Service and Cookie Policy.</s>(AP) – Cigna says it is rejecting Anthem’s proposed $48 billion acquisition bid and suing the Blue Cross-Blue Shield insurer.

The announcement comes hours after another major insurer, Aetna, said it was abandoning its planned $34 billion purchase of Medicare Advantage provider Humana.

The Department of Justice sued last summer to stop the deals due to concerns about how they would affect prices and consumer choices. Federal judges rejected both deals in separate rulings earlier this year.

Anthem Inc. had filed paperwork Monday to appeal its case.

Cigna Corp. says it is seeking a $1.85 billion termination fee from Anthem and more than $13 billion in damages caused by what it says were Anthem’s breaches of the merger agreement.

An Anthem spokeswoman did not immediately return a call seeking comment.
• See also: Aetna, Humana call off $34 billion deal
Cigna announces that it has terminated its merger with Anthem, a deal that was blocked by a U.S. federal judge last week. In addition, Cigna sues Anthem for the $1.85 billion reverse termination fee, and for more than $13 billion in additional damages. Anthem says Cigna has no right to terminate the merger, a deal which in January was extended to April 30, 2017.