Anthem won't back down on bid to take over Cigna
Though Cigna has publicly rebuked its takeover offer, Anthem indicated it will not be deterred in its quest to acquire its fellow health insurer.
"The healthcare market is evolving, with increased participation by individual consumers, growth in government business and a need for solutions that advance affordability while enhancing healthcare choice, access and quality," Anthem CEO Joseph Swedish said in a conference call with investors Monday. "We believe that the combination of Anthem and Cigna better positions both companies to address this evolving market."
An Anthem-Cigna merger would create a company that boasts 53 million plan members--eclipsing UnitedHealth Group as the largest insurer by enrollees, Swedish said. The company would also rake in $115 billion in annual revenues based on the most recent publicly reported outlooks from Anthem and Cigna. Finally, the merger would swell Anthem's ranks of Medicare patients by allowing it to expand its reach to such patients in Florida and Texas, Swedish said.
But the merger proposal does not sit well with Cigna's board of directors, as it sent Anthem's board a sharply worded letter Sunday to indicate that it had voted unanimously to reject Anthem's offer to buy the company for $184 a share, FierceHealthPayer reported. The letter also states that Cigna found Anthem's recent actions--including making its most recent bid for the company public--"deeply disappointing."
Cigna is concerned about Anthem's data breach in February and what it described as Anthem's lack of a growth strategy. It also raised concerns about Anthem's dealings with BlueCross BlueShield (BCBS), the latter of which prevents Anthem from using its brand in regions where it doesn't have the Blue Cross license or own a Blues plan, Forbes notes.
But in his call with investors, Swedish dismissed those concerns, saying BCBS rules would give Anthem two years to work out such licensing issues in the event of a deal with Cigna.
"Our management team has delivered consistently strong returns for shareholders and is absolutely confident in its ability to achieve the value inherent in this transaction," Swedish said in an accompanying statement.
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