On February 14, 2017, Cigna Corp. (Cigna) announced it would drop its $54 billion merger with Anthem, Inc. (Anthem) and filed an action against Anthem in the Delaware Chancery Court for a declaratory judgment that Cigna had legally terminated the agreement, and that Anthem could not extend the termination date for the transaction.  Cigna also seeks the $1.85 billion reverse termination fee specified in the merger agreement and approximately $13 billion in damages, which include, among other things, the alleged premium that the company’s shareholders did not receive, due to the failed merger.  In response, Anthem issued a statement that it had already extended its merger agreement with Cigna through April 30, 2017 and that Cigna did not have the right to terminate the agreement under the terms of the deal. 

Cigna’s action is the latest in a number of developments in the DOJ’s challenges to the Anthem/Cigna and Aetna/Humana transactions.  On February 8, 2017, the United States District Court for the District of Columbia granted the Department of Justice, Antitrust Division’s request for an injunction blocking Anthem’s proposed $54 billion acquisition of Cigna.  This decision came just weeks after the D.C. district court granted the DOJ’s request for an injunction to block Aetna Inc.’s (Aetna) proposed acquisition of Humana Inc. (Humana) for $37 billion. 

For an analysis and implications of the Anthem/Cigna decision, see King & Spalding’s Client Alert, available here.  In addition, for a full analysis of the Aetna/Humana decision, see King & Spalding’s article, as published in Law360, available here.