Cigna claims that it's owed around $16 billion as the injured party in the deal, while Anthem says it's owed $20 billion after Cigna intentionally scuttled the deal.
Feuding Cigna Corp. and Anthem Inc. are waiting for a chancery court judge in Delaware to decide which of the two health insurance giants is owed billions of dollars in compensation after 2017's collapsed merger bid, CT Mirror reports.
In a trial that began Feb. 25, Cigna told Delaware Chancery Judge Travis Laster that it's owed around $16 billion as the injured party in the deal, while Anthem says it's owed $20 billion after Cigna intentionally scuttled the deal.
Although Cigna shareholders were expected to collect a 30% premium with the merger, Anthem alleged that Cigna CEO David Cordani sabotaged the deal because he would have had a reduced role as COO in the newly merged company, which would be led by Anthem CEO Joe Swedish, Bloomberg reported.
Anthem announced plans to acquire Cigna in 2015 for $49 billion in cash and stock, which if finalized would have created the largest health insurance company in the nation. However, the merger collapsed in 2017 after the Department of Justice successfully sued to block the deal after raising antitrust concerns.
The collapsed merger talks, suit, and countersuit exposed bitter fighting among top executives at both companies.
During the DOJ antitrust trial in late 2016, transcripts obtained by The Wall Street Journal revealed details about the continuing antagonism between Anthem and Cigna's top executives.
Cordani confirmed to the court that Cigna had stopped participating in some merger activities, saying he worried that Anthem's integration strategy could damage Cigna's network and value, the Journal reported.
Swedish testified that when Cigna stopped cooperating with the merger plan, Anthem created a confidential team to complete the task without Cigna's knowledge, according to the documents.
DOJ attorneys expressed concern that the rift could cause the merger to fall apart even if the court allowed the plans to proceed, and that such a failure could harm both companies' customers.
That prompted the U.S. District Judge Amy Berman to question the insurers' promises of a smooth consolidation. "How do you work on integration without talking to the person you're integrating with?" Jackson asked.
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
KEY TAKEAWAYS
The collapsed merger talks, suit, and countersuit exposed bitter fighting among top executives at both companies.
a Delaware chancery judge will decide which of the two health insurance companies will collect billions of dollars in damages.