Today, CIGNA provided an investor "Q &A" session on its decision to terminate the CIGNA/Anthem merger.    The following is a portion of that Q&A:  

1.  What did the District Court decide?

On February 8, 2017, the U.S. District Court for the District of Columbia issued an order enjoining the proposed merger between Cigna Corporation and Anthem, Inc.  Judge Jackson's decision to block the merger was based on numerous factual determinations, including:

  • National Accounts:  Judge Jackson found that the merger would result in a level of market concentration that would be presumptively unlawful in the market for national accounts in the 14 states where Anthem is the Blue Cross Blue Shield licensee.  She also concluded that the merger would result in higher prices for the ASO insurance that Anthem and Cigna sell and that it would have other anticompetitive effects, including eliminating the two firms' vigorous competition against each other for national accounts and diminishing the prospects for innovation in the market.
  • Blue Cross Blue Shield Association:  Judge Jackson found that the entities organized under the Blue Cross Blue Shield Association, including Anthem "work together to win national business" and that Anthem's intention to "rebrand" Cigna customers as Blue customers – to ensure that Anthem did not violate restrictive rules imposed by the Blues association – could adversely impact competition.   The Court additionally found that the rules of the Blue Cross Blue Shield Association give rise to "an inherent conflict of interest" vis-a-vis the transaction.
  • Efficiencies:  The district court rejected Anthem's principal defense:  that the anticompetitive effects of the transaction would be outweighed by efficiencies that would benefit consumers.  Judge Jackson noted in her opinion that Anthem had "not pointed the Court to a single litigated case in which the merging parties were successful in overcoming the government's case by presenting evidence of efficiencies."

The full document can be found on the Securities and Exchange Commission website,  here.