Judge blocks $48 billion merger of Anthem and Cigna

Feb. 9 (UPI) -- A ruling by a federal judge blocked $48 billion merger between health insurers Anthem and Cigna, weeks after a similar Aetna-Humana merger was blocked.

District of Columbia Judge Amy Berman Jackson, in a 12-page ruling Wednesday, said the proposed Anthem-Cigna merger is "likely to lessen competition substantially in the market for the sale of commercial health insurance."

"The evidence has also shown that the merger is likely to result in higher prices, and that it will have other anti-competitive effects. It will eliminate the two firms' vigorous competition against each other for national accounts, reduce the number of national carriers available to respond to solicitations in the future, and diminish the prospects for innovation in the market."

The merger plan was announced in 2015. Then-U.S. Attorney General Loretta Lynch announced lawsuits aiming to block it on anti-trust grounds a year later.

The companies said in court that a merger could save billions of dollars and thus enhance competition. The government argued any savings would come only if the companies cooperated in integrating their businesses. Jackson noted disagreements between Anthem and Cigna, notably testimony by Cigna executives who view the projections of savings as incorrect, and Cigna's refusal to approve Anthem's findings of fact. She rejected Anthem's urging of the court to "minimize the merging parties' differences as a 'side issue.'"

Under the merger terms, Anthem is obligated to pay Cigna a $1.85 billion breakup fee since the merger will not occur.