Delaware’s apex court has ruled that Cigna will not be paid a $1.85 billion termination fee over its failed merger with Anthem.
- No question asked: The state’s Supreme Court did not elaborate why the Bloomfield, Conn.-based insurer could not clawback the fine. The announcement upholds an August 2020 decision made by the Delaware Chancery Court. It concludes a bitter, years-long battle between the two payers and their top executives tied to the failure of their $54 billion mergers, which would have created the nation’s largest insurer.
- Past story: The two insurers struck a merger agreement back in 2015. Anthem had proposed to buy Cigna for more than $54 billion, in a deal that would have created the largest health insurer in the U.S.But disagreements over who would lead the combined company, and an antitrust case, ultimately sunk the deal.
- What instigated the clash: Cigna CEO David Cordani had expected to lead the combined company, starting as president and COO, and eventually succeeding former Anthem CEO Joseph Swedish. But as Anthem began to act more as an acquirer, and began to iron out the details of how the two companies would integrate, Cigna began to push back, and tensions between the two companies continued to escalate.
- Damages sought: Both companies had sought damages. Cigna sought the $1.85 billion breakup fee, and Anthem sought $21 billion, claiming Cigna intentionally tanked the deal. The most recent ruling makes it final: Neither company will receive a dime.
- Star-crossed venture: “In this corporate soap opera, the members of executive teams at Anthem and Cigna played themselves,” Vice Chancellor J. Travis Laster wrote in his opinion handed down in Delaware State Chancery Court. “Cigna failed to prove that Anthem breached its obligations under the Efforts Covenants and Cigna failed to prove that it is entitled to the Reverse Termination Fee. Each party must bear the losses it suffered as a result of their star-crossed venture.”