Anthem Inc. will go to court in an attempt to stop California Insurance Commissioner John Garamendi from blocking its $16.4 billion merger with WellPoint.
Anthem CEO Larry Glasscock told Wall Street analysts during a conference call last week of his plans to file a lawsuit to block the commissioners action. That caused some surprise, as there was speculation the two companies would spin off the estimated 4% of the combined company that fell under Garamendis authority.
But Glasscock said all efforts remained focused “on completing the deal in its entirety.”
Last October, officials of the two giant Blues consolidatorsIndianapolis-based Anthem Inc. and Los Angeles area-based WellPoint Health Networksannounced plans to merge. Garamendis approval remained the final regulatory hurdle.
Standard & Poors analyst Shellie Stoddard called Garamendis move a “considerable roadblock,” but noted that this was not the first time managed care mergers have been blocked by concerns raised by the commissioner.
“It is a big current issue and popular topic, and will continue to be,” she said. “The health insurance industry does not seem to be allowed to make as strong margins as other industries just by the very nature of its product. And that holds true for its executives.”