Anthem calls off Cigna merger, says it won't pay $1.85B break-up fee

Indianapolis-based Anthem terminated its merger agreement with Bloomfield, Conn.-based Cigna, ending the insurers' attempt to create one of the largest payers in America.

Here are five things to know.

1. Anthem's decision comes on the heels of a Delaware Court of Chancery ruling allowing Cigna to legally walk away from the $54 billion deal.

2. Under the original agreement, Anthem owed Cigna a $1.85 billion break-up fee if the deal collapsed. In a Friday statement, Anthem said "Cigna has failed to perform and comply in all material respects with its contractual obligations. As a result, Cigna is not entitled to a termination fee."

3. Anthem said "Cigna's repeated willful breaches of the merger agreement and its successful sabotage of the transaction has caused Anthem to suffer massive damages, claims which Anthem intends to vigorously pursue against Cigna."

4. In a response Friday Cigna reiterated its belief "that Anthem willfully breached" the merger agreement "and as a result the transaction did not receive the requisite regulatory approvals. Cigna seeks prompt payment of the $1.85 billion reverse termination fee and will pursue our claims for additional damages of over $13 billion against Anthem for the harm that it caused Cigna and its shareholders."

5. Andrew Gurman, MD, president of the American Medical Association, said the "action marks the end of a proposed merger that the American Medical Association, courts and regulators widely condemned as a bad deal for patients and harmful to the nation's health system. The termination of the Anthem-Cigna merger is a clear victory to preserve competition in the health insurance industry." 

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