A federal judge ruled Friday that the U.S. Justice Department will get its hands on documents alleging Anthem and Cigna Corp. breached the terms of their merger agreement.
In a brief order, U.S. District Judge Amy Berman Jackson ruled that Anthem and Cigna must turn over any attorney correspondence discussing purported breaches of their $53 billion merger to the feds as part of an antitrust challenge to the proposed deal. The Justice Department initially requested the documents last month after Cigna admitted there had been “further deterioration” between the companies, maintaining the caustic relationship showed the merger wouldn't create efficiencies in the market.
Anthem and Cigna have seemingly been at odds for months, as Anthem has pushed for an expedited trial in the merger challenge. If the companies don't close their merger by April 30, 2017, Cigna can choose to walk away and score a $1.85 billion breakup fee from Anthem.
The insurers initially fought the Justice Department's requests for additional information on the merger breaches, saying communication between in-house attorneys were irrelevant to the feds' antitrust lawsuit. But a retired judge overseeing discovery in the case disagreed, recommending the information be turned over, and Jackson agreed.
The decision comes just weeks after Jackson decided to split the antitrust trial in two, in an attempt to provide a quicker decision if the Justice Department shows the proposed merger will have anti-competitive effects on the national market. Opening statements will be heard on Nov. 21. After the national market evidence wraps up, the court will recess for one week before potentially returning to hear evidence on the impact to local markets.
The Justice Department sued to stop the merger in July, and several states including California and New York joined the challenge. The feds are also challenging the Aetna's proposed $37 billion takeover of Humana in a separate lawsuit. That trial will begin in December.
