A federal appeals court on Friday declined to allow health insurer Anthem Inc. to acquire Cigna Corp., affirming a trial judge's recent ruling that blocked the deal on antitrust grounds.
The decision is another major legal blow to Anthem's effort to salvage a transaction that already was on its last legs.
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A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit, in a divided ruling, rejected Anthem's argument that the trial court didn't properly weigh the company's claim that the merger would produce billions of dollars in cost savings.
Anthem and Cigna agreed to the deal in July 2015. The Justice Department spent a year reviewing the proposed merger before filing an antitrust lawsuit to challenge it.
The appeals court was reviewing a judgment by U.S. District Judge Amy Berman Jackson in Washington, D.C., who held a month-long trial at the end of 2016 and ruled against Anthem in February. Judge Jackson found the merger would unlawfully suppress competition among large health insurers, harming multistate employers that already have only a few competing choices when insuring their workers.
The litigation has played out amid acrimony between Anthem and Cigna. The companies had been feuding even before the Justice Department filed its lawsuit, with each company accusing the other of violating their merger agreement.
After Judge Jackson blocked the deal, Cigna and Anthem sued each other in Delaware state court, where litigation continues. Cigna tried to terminate the transaction in February but a Delaware judge barred the company from doing so.
Anthem has said that under the terms of the merger agreement it could extend the deal until the end of April.
Neither Anthem nor Cigna immediately responded to requests for comment.
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(END) Dow Jones Newswires
April 28, 2017 11:00 ET (15:00 GMT)