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Cigna won't receive $1.85 billion from the breakup with Anthem, court rules

Court documents reveal a contentious relationship, and now neither party will receive compensation for the failed merger.

Jeff Lagasse, Associate Editor

Photo by Martin Barraud/Getty ImagesPhoto by Martin Barraud/Getty Images

The Delaware Supreme Court ruled Monday that health insurer Cigna won't receive a $1.85 billion breakup fee after the dissolution of its attempted merger with Anthem. Neither entity will receive any funds for the breakup, the court decided, backing up a previous decision from Chancery Court Vice Chancellor J. Travis Laster in 2020.

"Neither side can recover from the other," wrote Laster in the 2020 ruling. "Each must deal independently with the consequences of their costly and ill-fated attempt to merge."


The merger attempt was initiated back in 2015, with Anthem setting its sights in purchasing Cigna for around $54 billion in a deal that would have created the largest health insurer in the U.S.

The relationship began to deteriorate the year after the merger was announced. At about the same time, the U.S. Department of Justice sought to block the deal, citing antitrust concerns. In 2017, a federal court sided with the DOJ, saying that the merger would decrease competition.

Cigna had wanted out. During court proceedings, letters and emails between the insurers showed a bitter relationship. After the court ruled against the merger and Anthem's announcement of an appeal, Cigna brought a lawsuit in which it said the deal was over and that it was entitled to $13 billion in damages from Anthem, as well as the agreed-upon breakup fee of $1.8 billion.

Anthem, in turn, successfully compelled the court to keep Cigna in the deal as the deal headed to appeal, and filed a petition with the Delaware Supreme Court requesting a review.

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.


In 2018 an Anthem shareholder filed a similar lawsuit against current and former Anthem leadership, alleging a breach of fiduciary duties and corporate waste linked to the merger agreement – a case that, according to Anthem's quarterly report, had been stayed while the two organizations awaited final word from the Delaware Supreme Court.

Last year, Cigna investors claimed in a lawsuit that Cigna's leadership used "black-ops style" tactics in a covert campaign to sabotage the deal. A Massachusetts-based pension fund alleged that Cigna CEO David Cordani sought to thwart the deal after failing to secure the top post in the merged company.

Twitter: @JELagasse
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