Anthem asks Supreme Court to review blocked Cigna deal
- Author: Joanne Flowers May 06, 2017,
May 06, 2017, 20:22
Health insurer Anthem is not ready to give up its $48-billlion bid for rival Cigna and now hopes to find a favorable audience in the U.S. Supreme Court.
Cigna insists that Anthem owes it a $1.8 billion termination fee because the deal could not be completed. Anthem sought an injunction in that case and on Monday will be presenting arguments in a DE court for why the proposed merger shouldn't be broken up.
A week after its $54 billion merger with Cigna Corp. was shot down for a second time, national health insurer Anthem said it is asking the U.S. Supreme Court to review its case.
Cigna sued in district court in DE to terminate the planned merger and Anthem won a temporary restraining order to block that move.
"Citing the circuit split over the consideration of efficiencies in merger analysis, Anthem urges that 1960s-era merger precedents relied upon by the courts below must be updated to reflect the modern understanding of economics and consumer benefit", Anthem said Friday.
The U.S. House of Representatives on Thursday narrowly approved a bill to repeal and replace Obamacare, handing Republican President Donald Trump a victory that could prove short-lived as the healthcare legislation heads for a likely battle in the Senate. Anthem quoted Kavanaugh who wrote that the record demonstrates the merger would be beneficial to employer-customers who obtain insurance from Anthem and Cigna. It has touted the deal as a way to help the companies negotiate better prices with pharmaceutical companies, hospitals and doctor groups.
Industry experts have suggested any consumer impact from the deal would take years to materialize and could lead to savings in some areas but higher costs elsewhere.
Evercore ISI analyst Michael Newshel said the odds for Anthem's success seem quite low and still expects the merger to break.