U.S. court blocks Anthem-Cigna $54 billion deal

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By Diane Bartz and Caroline Humer

<span class="articleLocation”>A federal judge on Wednesday ruled against U.S.
health insurer Anthem Inc’s proposed $54 billion merger
with smaller rival Cigna Corp, derailing an unprecedented
effort to consolidate the country’s health insurance industry.

The U.S. Justice Department sued in July to stop Anthem’s
purchase of Cigna, a deal that would have created the largest
U.S. health insurer by membership, and Aetna Inc’s
planned $33 billion acquisition of Humana.

On Wednesday, Judge Amy Berman Jackson of the U.S. District
Court for the District of Columbia issued the ruling against
Anthem’s deal under seal. Last month, a different U.S. judge
ruled against Aetna’s proposed deal for Humana.

Berman had separated the Justice Department’s case into two
trials. In one, she weighed arguments over whether the tie-up
would hurt the ability of large national employers to get
competitive rates for the health coverage they provide workers.

The second trial considered overlaps in the two insurers’
business selling health benefits to individuals, and
administering Medicare Advantage coverage to the elderly.

Government antitrust officials argued that both deals would
lead to less competition and higher prices for Americans. The
acquisitions would have reduced the number of large national
U.S. insurers from five to three.

Cigna is entitled to receive from Anthem a $1.85 billion
break-up fee if the deal fails to win regulatory approval.
Officials from both companies were not immediately available for
comment.

The Justice Department argued that the deal would likely
lead to higher prices for big, nationwide employers whose
workers use a broad network of services. It additionally argued
that the two companies were the biggest options for large-group
employers in at least 35 metropolitan areas.

Eleven states and the District of Columbia joined the
Justice Department in fighting the deal.

Anthem has argued that merging with Cigna would allow it to
get bigger and push down prices to customers. Anthem, the
largest member of the Blue Cross Blue Shield Association, has
said it is not truly a national insurance company because it is
only in 14 states. (Additional reporting by Akankshita Mukhopadhyay and Dipika
Jain in Bengaluru)



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