Dive Brief:
- Disputes up in the highest levels of management may be causing a delay in the proposed acquisition of Cigna by Anthem, according the Wall Street Journal.
- The Journal reports, based on a series of letters reviewed by the newspaper, that behind-the-scenes disagreements are frequent as the two entities await regulatory approval for their massive deal.
- According to the Journal, both sides believe the issues could "delay or derail" antitrust approvals, which usually require cooperation for a smooth process. The deal is still expected to go through, says the Journal, but the clashes are occurring on several fronts.
Dive Insight:
Mergers and acquisitions are rarely easy, but a major hurdle here is that both sides have privately accused the other of violating their July merger agreement and doing a poor job with submissions to regulators.
One major issue, the Journal reports, is Anthem’s lawsuit against Express Scripts Holding Co., a prescription drug provider. The March complaint accuses Express Scripts of overcharging Anthem for drugs and seeks about $15 billion in damages. But Cigna Chairman Isaiah Harris Jr. stated in an April 9 letter to Anthem’s board that the litigation was a potential negative for regulatory approval and the combined company’s value, the Journal reported. Anthem disagreed by letter, reminding Cigna’s board that the latter knew about the possibility of a lawsuit early in merger talks.
The article outlined other disputes, including some spats between Cigna CEO David Cordani and Anthem CEO Joseph Swedish, and several tales of sloppy document submissions by both sides. Spokespeople for both companies declined to comment, according to the Journal.
Once finished, the deal would create the largest U.S. health insurer by members (more than 54 million) and $117 billion in annual revenue.
