Anthem, Indianapolis, filed a lawsuit challenging California Insurance Commissioner John Garamendi's denial of part of its planned merger with WellPoint Health Networks, Thousand Oaks, Calif. The lawsuit, filed in Los Angeles County Superior Court, seeks to overturn the denial of Anthem's purchase of BC Life & Health Insurance Co., a unit of WellPoint, and to prohibit Garamendi from blocking the $16.4 billion merger. "Filing this lawsuit is something we did not want to do," Anthem Chairman, President and Chief Executive Officer Larry Glasscock said in a news release. "However, we genuinely feel we have met all the legal requirements necessary for approval of the merger."
The deal, announced in October 2003, has been approved by the Justice Department, both companies' shareholders, regulators in 10 of the 11 states that have a direct say on the matter, and the California Department of Managed Health Care, which regulates 90% of WellPoint's business in the state. Garamendi, however, rejected the merger July 26 over concerns that policyholders would wind up paying nearly $4 billion in transactions costs. -- by Laura B. Benko