With November Date Set For Anthem-Cigna Trial, Merger's Future Uncertain
A federal judge announced Friday she doesn't plan on reaching a decision in the Department of Justice's lawsuit challenging the troubled Anthem-Cigna merger, a development that throws the future of the massive $54 billion acquisition further into question.
The merger between Indianapolis-based Anthem and Connecticut-based Cigna has an expiration date of April 30, 2017. In order for Anthem to close the deal, a judge will need to rule in the company's favor while also leaving significant time for the deal to get approval from state regulators.
To that end, Anthem had been pushing for a decision before the end of the year. Judge Amy Berman Jackson, during a scheduling hearing last week, said that timeline was impossible to work with and set a trial date for November 21st with an expected decision in the case by the end of January --later than Anthem wanted.
Judge Jackson reiterated throughout the hearing she didn't understand why the federal government needed to bend over backwards to comply with what she saw as an arbitrary deadline, saying it is quote, "a bizarre situation, that we are doing all of this for a merger that may not be desired."
Cigna has not shown signs it is interested in extending the merger agreement past the spring deadline. During the hearing, a lawyer for Cigna repeated the company is committed to its obligation to Anthem and can't predict what the company will do if the merger isn't completed in time.
However, Anthem has indicated in court filings the situation between the two companies has become contentious. If the merger falls apart, Cigna will be able to collect a $1.8 billion breakup fee, but only if it plays nice with Anthem for the next eight months.
"Of course Mr. Rule has to say that Cigna is committed to the agreement," said Anthem Counsel Chris Curran, "otherwise, the $1.8 billion is at risk."