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Chancery Court Determines that Merger Partner Breached “Efforts Covenants” in Connection with “[S]tar-[C]rossed” Combination of Health Insurance Giants

Posted by on Saturday, August 28, 2021 in Delaware Corporate Law Bulletins, En Banc, Volume 74.

Robert S. Reder & Connor J. Breed | 74 Vand. L. Rev. En Banc 383 (2021) |

Amid a flurry of industry consolidations, Anthem, Inc. (“Anthem”) and Cigna Corporation (“Cigna”), the second and third largest health insurers in the United States, entered into an Agreement and Plan of Merger dated July 23, 2015 (“Merger Agreement”). In what Vice Chancellor J. Travis Laster of the Delaware Court of Chancery (“Chancery Court”) subsequently labelled a “corporate soap opera,” the relationship between the two industry giants quickly soured, largely over integration and leadership-related issues. Recognizing that the proposed consolidated enterprise (“NewCo”) would be the nation’s largest health insurer, the United States Department of Justice (“DOJ”) successfully sued to block the transaction in the U.S. District Court for the District of Columbia (“DC District Court”). Once the Merger Agreement was terminated, litigation ensued in Chancery Court, with each of Anthem and Cigna alleging that the other breached various Merger Agreement provisions. 

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Robert S. Reder

Connor J. Breed