NEW YORK (EON) Cigna Corp. CEO David Cordani said Friday that the Bloomfield health insurer’s tension-filled $54 billion planned merger with Anthem, which has been blocked by a federal judge’s antitrust ruling, is heading to the U.S. Supreme Court.
During an earnings conference call with analysts and investors, Cordani said Anthem has filed a petition with the High Court to review the federal court’s decision.
Cigna, which spent $49 million in merger-related costs in the first quarter, has been trying to get out of the deal for months and has sued Anthem to do so. Cigna wants Anthem to pay a $1.85 billion breakup fee and nearly $14 million in damages. Anthem sought an injunction in that case and on Monday will be presenting arguments in a Delaware court for why the proposed merger shouldn’t be broken up.
“Citing the circuit split over the consideration of efficiencies in merger analysis, Anthem urges that 1960s-era merger precedents relied upon by the courts below must be updated to reflect the modern understanding of economics and consumer benefit,” Anthem said Friday.
Meantime, Cigna also announced Friday that its first quarter profits rose 15 percent from growth in its commercial and individual business lines.
In the period ended March 31, the company’s net income rose to $598 million, or $2.30 per share, compared to $519 million, or $2 per share, in the year-ago period.
Revenues rose 5 percent to $10.4 billion compared to $9.9 billion in the year-ago period.
Cordani and CFO Tom McCarthy said that Cigna has “continued to deliver double-digit growth” across all business segments while delivering affordable and personalized benefits to customers and partners.
Cordani emphasized Cigna’s efforts in “actively listening” to customers and partners and implementing value-based approaches to health care.
Cordani said the company also expects to be able to participate in the Medicare Advantage prescription market again this fall. The company has been suspended from writing new business in that segment because of a long-standing history of noncompliance with federal requirements.
Cigna said it expects full-year earnings in the range of $9.25 to $9.75 per share.