Judge poised to block Anthem-Cigna deal

A federal judge is reportedly set to block Anthem’s acquisition of Cigna, but there are signs the larger insurer is already preparing to fight that decision with an appeal.

Citing anonymous sources, the New York Post reports that Judge Amy Berman Jackson could rule against the deal as early as today. In a new filing with the Securities and Exchange Commission, Anthem disclosed that it elected to extend the merger’s termination date to April 30, saying it needed additional time to consummate the merger “regardless of the outcome” of the antitrust suit against it.

Anthem can appeal any ruling that doesn’t go its way, sources told the NY Post, so the termination date extension may be the company’s way of giving itself time to do so. But Anthem has not been alone in its move to extend its merger deadline; Aetna and Humana extended theirs for the second time in late December, moving it to Feb. 15.

In July, the Justice Department sued to block both major insurer mergers, saying they both violate antitrust regulations by threatening competition in several key health insurance markets. Anthem and Cigna’s trial began in November, shedding further light on the simmering conflict between the two companies.

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Adding to concerns about the deal, an Anthem executive testified in early December that the merged company would fall short of the Blue Cross Blue Shield Association’s requirement that it get the bulk of its nationwide revenue from Blues-branded products, which if not corrected could incur a fine of $3 billion.

Cigna CEO David Cordani has also been lukewarm in his support of the merger since the DOJ decided to sue, saying in an earnings call in August that Anthem “independently” decided to fight for the deal and adding that Cigna would look into pursuing other growth opportunities if the deal failed.