On April 28, 2017, the United States Court of Appeals for the District of Columbia Circuit rejected Anthem, Inc.’s (Anthem’s) appeal of the D.C. district court’s order blocking its proposed $54 billion acquisition of Cigna Corp. (Cigna).  On appeal, Anthem argued that the district court failed to appropriately evaluate  the extensive efficiencies that would result from the merger.  According to Anthem, the merger would take advantage of Cigna’s superior product and Anthem’s lower rates and create substantial cost savings.  The Circuit Court found in a 2-1 decision, however, that Anthem failed to demonstrate that the efficiencies would be sufficient to offset the anticompetitive effect of removing Cigna from a “highly concentrated market.”  The Circuit Court’s opinion is available here.

The merger’s outcome is still unclear.  Anthem and Cigna sued each other in the Delaware Chancery Court following the district court’s decision earlier this year.  Cigna is seeking the $1.85 billion breakup fee it is owed under the merger agreement plus damages, while Anthem has alleged Cigna undermined its defense of the merger in federal court.  At a hearing set for May 8, the Delaware Chancery Court will decide whether to extend an order preventing Cigna from walking away from the merger until the end of the Delaware litigation.