(Bloomberg) — Anthem and Cigna Corp., the health insurers fighting a federal antitrust lawsuit, have accused one another of breaching their $48 billion merger agreement, the Justice Department said in a court filing.
A lawyer for Cigna said during a teleconference last month that in-house attorneys for the companies had exchanged letters alleging each violated the deal’s terms, the government said in the filing Wednesday in Washington. The Justice Department raised the issue as part of a dispute over evidence in its lawsuit against the insurers seeking to stop their merger.
“Governance disputes between defendants have escalated, and the firms are now accusing each other of breaching the merger agreement,” the U.S. said. “Because the breach letters reveal the current state of hostility between defendants, the letters evince barriers to integrating these firms and are relevant to” one of the defenses raised by the companies.
At stake is the $1.85 billion breakup fee Anthem would owe Cigna if the deal gets blocked by antitrust hurdles. Tensions between Anthem, which is based in Indianapolis, and Cigna, which is based in Bloomfield, Connecticut, have been evident since the Justice Department sued the companies. Anthem has said there is “contentiousness” with Cigna and says Cigna intends to walk away from the deal after an April 30 deadline.
Anthem shares rose 1 percent to $127 at 1:42 p.m. in New York after earlier climbing as much as 2.3 percent, the biggest intraday gain in more than a month. Cigna shares fell 0.3 percent to $131.
Matt Asensio, a spokesperson for Cigna, declined to comment, saying the company has a policy not to talk about litigation. Bonnie Jacobs, a spokeswoman for Anthem, declined to comment.