Anthem, Cigna Accuse Each Other Of Breaching Merger Deal

(RTTNews) - Anthem Inc. (ANTM) and Cigna Corp. (CI) have accused one another of breaching their $48 billion merger agreement, the U.S. Justice Department said in a court filing.

A lawyer for Cigna said during a teleconference last month that in-house attorneys for the companies had exchanged letters alleging each violated the deal's terms, the government said in the filing Wednesday in Washington. The Justice Department raised the issue as part of a dispute over evidence in its lawsuit against the insurers seeking to stop their merger.

the U.S. said, "Governance disputes between defendants have escalated, and the firms are now accusing each other of breaching the merger agreement. Because the breach letters reveal the current state of hostility between defendants, the letters evince barriers to integrating these firms and are relevant" to one of the defenses raised by the companies.

Tensions between Anthem and Cigna have been evident since before the Justice Department sued the companies in July to stop the merger, which it says would reduce competition and reduce choice for consumers. At court hearing in August, an Anthem lawyer said there is "contentiousness" with Cigna and that Cigna intends to walk away from the deal after an April 30 deadline for closing the deal rather than extend the timing.

The government lawsuit is scheduled to go to trial on November 21. As part of their case, Justice Department lawyers are seeking all documents from the companies related to alleged breaches of the merger agreement. The companies are withholding correspondence between their in-house lawyers alleging the breaches, the government said in Wednesday's filing.