Anthem Inc., whose $48 billion acquisition of healthcare insurance rival Cigna has run into stiff regulatory headwinds, appears ready to walk away from the deal, The Post has learned.
Anthem Chief Financial Officer John Gallina told a group of 20 analysts earlier that the Indianapolis-based company was working on “remediation plans” that include buying assets from Aetna, two sources at the meeting last week said.
Anthem, the No. 2 healthcare insurer in the US, would not be talking about buying assets from Aetna — which is in the process of buying rival Humana — if it intended to press ahead with plans to buy Cigna, the fourth-largest health-care insurer, sources said.
The discussion by Gallina occurred on June 21 — just five days after California regulators ripped into the deal, saying it would lead to higher insurance premiums.
The state’s insurance commissioner urged Washington to block the deal.
While Wall Street believes the Department of Justice is likely to sue in July to block the mega-deal, it is not known whether Anthem would stand and fight the move by the country’s highest regulator.
Anthem’s agreement runs through January 2017 — so it has the time to fight.
At the same time, fighting would be risky. Not only may Anthem lose, but it will likely miss out on the opportunity to buy Aetna’s assets.
Gallina’s talk with the analysts would seem to indicate the company is ready to cut and run.
Anthem announced last summer that it reached an agreement to buy Cigna.
The deal has a $1.85 billion breakup fee.
The breakup of the Anthem-Cigna deal would benefit the pending Aetna-Humana deal, sources said.
Regulators are pressing both of those companies to sell off assets to gain approval.
Aetna is in the process of shopping Medicare Advantage plans in certain markets to buyers, and Anthem cannot pursue them until it abandons its merger, sources said.
At the same time, there are some whispers that Anthem and Cigna have started talks about renegotiating the massive breakup fee.
An Anthem spokeswoman, though, said, “Anthem and Cigna are not in discussions regarding a termination of the merger agreement or the payment of a breakup fee.”
She had no comment on any statement made by Gallina at the June 21 meeting.
“Anthem and Cigna continue to hold an ongoing dialogue with the DOJ and state regulators regarding the compelling combination of our two companies to increase consumer access to high quality, affordable health care,” she said.
Cigna and Aetna spokesmen declined comment.
The Post on May 20 was the first to report that the DOJ did not like the Anthem deal.
Cigna, too, is likely interested in buying some of Aetna and Humana’s Medicare Advantage assets, sources said.
“The sooner the Anthem deal goes away, the better it is for Aetna [in its search for buyers],” a source said.