Anthem, Cigna squabbles could threaten proposed merger

Tensions are rising between potential merger partners Anthem and Cigna, which could make it even more difficult for the two health insurance companies to win over federal regulators, the Wall Street Journal reports.

The deal has been fraught with discord from the start, as Cigna rejected multiple offers from Anthem and then issued a sharp rebuke when Anthem took news of its takeover bid public.

One of the early points of contention between the insurers was Cigna CEO David Cordani's role in the combined company. Though the companies did arrive at a compromise, Cordani and Anthem CEO Joseph Swedish have still been at odds in the 10 months since, according to the WSJ. Here are the other issues that are leading the insurers' executives to butt heads:

  • Anthem's lawsuit against Express Scripts. The two companies' general counsels have traded pointed letters about the litigation, which accuses the pharmacy benefits management company of withholding prescription drug savings. Cigna sees it as a potential roadblock to the merger, but Anthem argues it will only be beneficial.
  • Top-level exits at Anthem. The resignation of Anthem Chief Financial Officer Wayne DeVeydt, who had served in his role since 2007, was worrisome--though the WSJ notes Cigna did not raise its concerns about executive departures to Anthem.
  • The regulatory process. Cigna made waves earlier this month with it warned investors its merger with Anthem could take longer than anticipated--while Anthem maintained its initial estimate. Anthem has accused Cigna of missing filing deadlines, submitting data to the Justice Department in the wrong format and holding back business information, the WSJ reports. Cigna, meanwhile, has said Anthem has been too slow to formulate a backup plan if the deal is blocked.

These internal quarrels join external forces working against the deal, as federal regulators have shown increasing wiliness to challenge major mergers.

To learn more:
- read the WSJ article

Related Articles:
Cigna's disclosure signals trouble ahead for insurer mergers
Insurer mergers beware: DOJ flexing its antitrust enforcement muscle
Cigna raises doubts about when deal with Anthem will close
Anthem sues Express Scripts over drug prices
Anthem names new chief financial officer
Cigna, Anthem trade barbs over 'deeply disappointing' takeover bid

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