Anthem Offers $47 Billion Takeover, Cigna Quickly Rejects

Rumors of mergers and acquisitions in the health care sector have been intensifying more and more. As insurers struggle to cut costs to offset new regulations and technological advances, mergers for many insurers are an increasingly attractive option. The most recent proposal by Anthem to acquire the health insurer Cigna would put Anthem’s annual revenue at over $114 billion and provide insurance for about 53 million people. A proposed merger of this immense size has never before been attempted in the healthcare sector.

 

Cigna quickly rejected the $47 billion offer because they felt that the bid was inadequate and that it was skewed in favor of Anthem shareholders. The offer amounts to $184 per Cigna share, which is only an 18% premium on Friday’s closing stock price. In the rejection, Cigna CEO David Cordani noted his concerns that Anthem failed to properly address past regulatory hurdles as well as the massive breach of Anthem customer’s data exposed earlier this year. The strongly worded rejection letter also complained that Anthem lacked a proper growth strategy considering Cigna’s stock has been outperforming Anthem in recent years. It is unclear if the acquisition talks are finished since Cigna said a deal with Anthem would offer considerable benefits to consumers, doctors and investors in both insurance companies “under the right circumstances”.

Written by Alison Killian

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Alison Killian is a recent graduate of Grove City College who majored in Business Management and minored in Biology Studies. She is a contributor to Medical Groups and passionate about all facets of healthcare. She plans on continuing work in the healthcare field especially in management. She is very interested in healthcare innovation and finding ways to improve the current system. She hopes to go back to school in a few years to earn a degree in medicine.