WILMINGTON, Del. (AP) — A Delaware judge on Thursday refused Anthem Inc.'s request to extend a temporary ban blocking Cigna Corp. from pulling out of proposed $48 billion merger while Anthem tries to persuade federal officials to drop their objections to the deal.
The ruling comes after a federal appeals court last month left in place a decision blocking Blue Cross-Blue Shield insurer Anthem's bid to buy rival Cigna, saying a bigger company would not be better for consumers.
That ruling followed a federal judge's February decision that the proposed acquisition would further reduce competition in the already concentrated health insurance market.
Meanwhile, Indianapolis-based Anthem and Bloomfield, Connecticut-based Cigna have been fighting in Delaware Chancery Court, where Cigna has sought a $1.85 billion termination fee from Anthem and billions more in damages. Anthem has filed its own lawsuit against Cigna. Each company claims the other failed to live up to its obligations.
In his ruling Thursday, Vice Chancellor J. Travis Laster said that in order to grant Anthem a 60-day preliminary injunction, he would have to find that Anthem had demonstrated a reasonable probability of overcoming the federal antitrust injunctions and being able to close the deal.
"That is not an easy task," he said.
While denying the injunction, Laster said he would stay his ruling while Anthem decides whether to file an appeal to the Delaware Supreme Court. He gave lawyers for Anthem until noon Monday to decide.
Anthem announced its bid for Cigna in 2015, saying a merger could help the companies negotiate better prices with pharmaceutical companies, hospitals and doctor groups. Critics have argued that it would result in fewer choices for health insurance consumers.
Cigna eventually soured on the deal, saying Anthem had failed to execute a strategy to obtain regulatory approval, worked to undermine Cigna's role in the transaction, and tried to use the deal to strengthen itself and other Blue Cross-Blue Shield entities.
Anthem has argued that Cigna has worked to sabotage the merger, and that Cigna's board and senior managers refused to go along unless they could keep their positions, including demanding that Cigna CEO David Cordani be named chief executive officer of the combined company.