With the merger being called off, Cigna wants the $1.85 billion owed to them by Anthem for a contractual “breakup fee”. In addition, Cigna is fighting for another $13 billion in damages, according to an article published on Healthcare Finance.
Anthem released a statement on Friday fighting against paying the termination fee, stating, “Cigna has failed to perform and comply in all material respects with its contractual obligations. As a result, Cigna is not entitled to a termination fee. On the contrary, Cigna's repeated willful breaches of the merger agreement and its successful sabotage of the transaction has caused Anthem to suffer massive damages, claims which Anthem intends to vigorously pursue against Cigna.”
After the federal court denied the merger earlier in the year, Cigna tried to exit the deal. Anthem then sought out a temporary order to keep Cigna in the agreement while they purposed an appeal for the court ruling – which was also denied by a Delaware court. By the terms of the July 2015 merger agreement and through extensions, Anthem and Cigna had until April 30 to merge. The breakup fee was part of the contract, in a deal valued at $54 billion.
As Anthem continues the fight, Cigna focuses on a strategic growth plan, hoping to move to solidify its marketplace position.